Illinois: Pathetic Fiscal Policy

Sorely in need of sustainable jobs and sound fiscal policy, Illinois lawmakers waved the magic casino wand, pronounced outrageous revenues, carefully avoiding the hard work needed to resolve their fiscal disaster.

Previously posted:
The 10 Worst States for Retirees

States of Disunion

Topping his website's list, Illinois's fiscal health could be the worst of any state, observed Brady. "It even borrowed money to fund its pension obligations," he said.

From the article below:

Seventy-five percent, or roughly $900 million, would be put toward the state’s $5 billion-plus in unpaid bills. The remainder would go toward projects passed in the 2009 capital construction bill.

Lang [The bill’s sponsor, Rep. Lou Lang, D-Skokie] said the casinos would bring in $1 billion in annual revenue for the state. [He neglected to add 'years down the road.]

House committee approves massive gambling expansion
By CHRIS WETTERICH
THE STATE JOURNAL-REGISTER

SPRINGFIELD -- After making concessions to Republicans, the Illinois House Executive Committee sent a mammoth gambling package to the House floor on Wednesday.

The measure cleared the committee on a bipartisan 8-3 vote, an exception to House Republicans’ steadfast opposition to nearly all major legislation being advanced by the Democratic majority in the closing days of this General Assembly.

The bill would create a land-based, city-owned casino in Chicago and four other new casinos – one in Rockford, one Park City in Lake County, one in Danville and a south suburban Cook County casino whose location would be determined by the Illinois Gaming Board.

The casino in Chicago would be operated by a private contractor.



GOP adds support

House Republicans voted for the bill after Democrats agreed to divert more of the one-time revenue from licensing fees to paying down the state’s backlog of bills.

“It was very important that we move for a greater portion of … those potential dollars going to pay down our debt,” said Rep. Dan Brady, R-Bloomington, the committee’s ranking Republican. Brady said he wouldn’t normally vote for expanding gambling, but did so because social service providers who are waiting for state payments could get their money faster.

The bill’s sponsor, Rep. Lou Lang, D-Skokie, estimated that the state would realize $1.3 billion in one-time licensing fees. Seventy-five percent, or roughly $900 million, would be put toward the state’s $5 billion-plus in unpaid bills. The remainder would go toward projects passed in the 2009 capital construction bill.

Lang said the casinos would bring in $1 billion in annual revenue for the state.



Riverboat owner opposition

The owners of the state’s existing riverboat casinos opposed the bill even though they will be allowed to add gaming positions at their casinos.

“This monumental expansion is like saying homes have lost 32 percent of their value in the last three years. And there are less people out there in the position of buying a home. So let’s build three times as many homes as we have now in the hopes that’ll help the economy,” said Tom Swoik, executive director of the Illinois Casino Gaming Association. “It just doesn’t make sense.”

Lang’s version also would allow slot machines at Chicago airports – although those slot machines would have to be placed behind the Transportation Security Administration checkpoints so O’Hare and Midway airports don’t become gambling destinations.

That provision still didn’t please Anita Bedell, executive director of Illinois Church Action on Alcohol & Addiction Problems.



Slots at airports, racetracks

“There are millions of people that go through those airports in Chicago with children,” Bedell said. “They already put kiosks with alcohol 24 hours a day there. They don’t need slot machines to go with it.”

The horse-racing industry would also benefit by being able to pay out larger purses at racetracks as a result of revenue from slot machines at the tracks, said Robert Molaro, a lobbyist for the industry. The hope is that Illinois will become competitive with other states with so-called racinos, whose purses are double and triple what Illinois tracks offer.

“This is the last breath for our industry,” Molaro said.

The bill still has a long way to go before it reaches the desk of Gov. Pat Quinn, who called it top-heavy during the legislature’s veto session. The bill could get a floor vote today in the House, but even if it passes there, it will have to go back to the Senate to adopt the House changes.

Sen. Terry Link, D-Waukegan, the bill’s Senate sponsor, said he would go along with the changes.

“I questioned some of the changes, but I can live with all of them,” Link said.


Other provisions

-- East Peoria casino could move within 10 miles of its current location.

-- Illinois Gaming Board could not issue new licenses until the 2,000 video gaming positions authorized by the General Assembly in 2009 are operating. Licenses for those terminals, the revenue of which is supposed to support the state’s capital construction program, have not been issued.

-- A $2 million renovation tax credit would be created for use by all riverboat casinos.

-- To allay concerns of existing casino owners about competition from the new casinos, table games would be taxed at a lower rate and the state would provide a 5 percent credit against existing casinos’ adjusted gross revenues for 10 years.

-- Racetracks could have slot machines and video gaming, but not table games.

-- Those with licenses could operate from a temporary facility during construction or renovation of a permanent site. “We want to get the money flowing,” said sponsor Rep. Lou Lang, D-Skokie.

-- Gambling facilities would have meet energy-efficiency standards.

Alabama: Growing Corruption Probe

Court papers indicate Ala. gambling probe growing

MONTGOMERY, Ala. (AP) — Federal prosecutors say in court papers that their gambling investigation in Alabama has grown beyond the legislators, lobbyists and casino owners who have already been indicted.

The disclosure comes in notes that FBI agents took during interviews with Country Crossing casino lobbyist Jarrod Massey, who has pleaded guilty to bribery and conspiracy.

Another lobbyist indicted in the case, VictoryLand representative Tom Coker, had sought complete copies of the FBI's notes from six interviews with Massey before his guilty plea Dec. 20. Coker's lawyer, David McKnight, said the notes are necessary to prepare Coker's defense.

Federal prosecutors provided copies but withheld some material, including entire pages. Attorneys with the Justice Department's Public Integrity Section said in court filings that the undisclosed material "pertains to an ongoing criminal investigation involving facts beyond the scope of the indictment in this matter."

They said disclosure of the material "at this juncture would risk exposing the details of such investigation."

When asked if the court papers indicate more people will be indicted, Justice Department spokeswoman Laura Sweeney said Monday she couldn't comment beyond the information in the court documents.

Coker's attorney said Wednesday the language in the court papers is not something the FBI routinely uses to try to keep notes private, and its presence is significant.

"There is definitely another investigation ongoing. What it entails I can't say," McKnight said.

Prosecutors have offered to give the complete notes to Coker's lawyer by Jan. 31 unless some reason arises to justify withholding the material. McKnight filed papers Wednesday saying he can agree to getting the notes no later than Jan. 31 "given the government's representation about the ongoing investigation."

Massey and Coker were among 11 people arrested Oct. 4 on an indictment accusing them of buying and selling votes on pro-gambling legislation. The remaining 10 defendants are scheduled for trial April 4.

Mashpee Wampanoag: Tribe leader was arrested on drug charge

Tribe leader was arrested on drug charge
By George Brennan

MASHPEE — The Mashpee Wampanoag Tribe's recently hired director of child welfare was arrested on a drug possession charge just four months before taking the job, according to court records.

Ronda Jones-Hughes, 35, was arrested Jan. 20 and charged by the Broward County (Florida) Sheriff's Office with possession of less than 20 grams of marijuana, according to records filed online by the Broward County clerk of courts. She pleaded no contest to the charge, according to court records, was ordered to pay a $100 fine, plus a $50 court fee.

Jones-Hughes is still listed on the tribe's website as the director, but a source said she was fired from the $70,000 per year job during a closed-door tribal council meeting on Dec. 29.

Court records show Jones-Hughes was returning from a cruise to the Bahamas when a police dog sniffed out the drugs in U.S. Customs.

In Massachusetts, Jones-Hughes would have been issued a civil citation because the amount she allegedly had in her possession was less than an ounce, but in Florida it's a misdemeanor charge.

The charges against Jones-Hughes were first reported on Reel Wamps, an anonymous blog that comments on Mashpee Wampanoag issues. Shortly after it was reported, the blog was taken down and Reel Wamps launched a website by the same name.

Paul Mills, a tribal elder and outspoken critic of the tribal council administration, said the hiring of Jones-Hughes is an example that tribal leaders are not running the tribe properly.

"We should have a no-tolerance policy in place for something like that, especially for someone working with children," Mills said. "The administration needs to be consistent with (criminal background) checks; everyone hired should be subject to one. That should be a matter of routine."

Tribal Council chairman Cedric Cromwell refused comment through a tribe spokeswoman. "The tribe does not comment on personnel matters," spokeswoman Brooke Scannell said in an e-mail.

In 2008, a tribe member was removed from his job as coordinator of Indian education with the Mashpee Public Schools after it was learned that a drug charge was overlooked.

Repeated calls Thursday and this week to the child welfare office and to Jones-Hughes cell phone listed on the tribe's website were not returned. A woman who answered the cell phone Tuesday said Jones-Hughes calls are now forwarded to her and she can no longer be reached at that number.

According to the tribe's website, the child welfare office provides children and their families with "access to community-based, culturally appropriate services that help them grow up safe, healthy, spiritually strong, and free from abuse." The office collaborates with the state's Department of Children and Families to "prevent out-of-home placement, to maintain family ties and responsibilities, to reunify families and to provide kinship permanency plans for children who cannot return home."

When she was hired for the job, Jones-Hughes, a member of the Lumbee Tribe of North Carolina, was heralded in the Mashpee Wampanoag's monthly newsletter for being an "active and visible advocate for American Indian children."

According to the newsletter, Jones-Hughes graduated with both bachelor's and master's degrees in social work from Rutgers University. She was also credited with establishing the Red Path Child and Family Agency in North Carolina, a first-of-its-kind placement agency for American Indian Children.

She was crowned Miss Indian North Carolina in 1998, the newsletter reported.

Mills and other elders are also once again raising questions about the tribe's finances in letters to Cape and Islands District Attorney Michael O'Keefe and Massachusetts Attorney General Martha Coakley.

In a Dec. 14 letter sent to Coakley signed by Mills, Ann Peters Brown and Patricia Oakley, the elders specifically question a $17 million loan the tribe has received from Malaysian investors Kien Huat. "The council refuses to produce valid financial reports or the audio tapes of minutes of meetings a concrete proof of government actions and votes," the letter states. "We have no way to stop the spending spree committed in our names while we have many tribal members homeless and hungry."

Scannell declined to comment on the letter but noted that Cromwell has written about finances, including the loan from investors, in the tribe's newsletter.

Coakley's office acknowledged receipt of the letter, but had no further comment. O'Keefe's office said there is no active investigation of the tribe as a result of the letter to his office.

State and federal courts have repeatedly ruled that they lack jurisdiction since the tribe was federally recognized in 2007, making it a sovereign nation with its own government and court.

The latest incarnation of REELWAMPS

Illinois: "Gambling State"

“Prairie State” will soon become the “Gambling State”

CHICAGO, Jan. 4, 2011 /CHICAGOPRESSRELEASE.COM/ — If some members of the Illinois General Assembly have their way, the “Prairie State” will soon become the “Gambling State,” paving the way for nearly 90,000 gambling positions in Illinois, challenging Nevada and every other state in the country for the amount of gambling available. Additionally the bill, which does not provide any additional regulatory personnel, will certainly lead to Crime Syndicate infiltration and political corruption.

“I would caution the members of the Illinois General Assembly to think long and hard before they vote for the legislation. It is beyond my comprehension that the Illinois Senate has passed this bill. I would strongly encourage a sober review by the Illinois House and urge them to reject this dangerous legislation,” according to Arthur J. Bilek, Executive Vice President of the Chicago Crime Commission. ”If passed, this legislation, more than any other in my memory, would change the complexion and perception of the City of Chicago and the State of Illinois…and not in a positive way,” he continued.

The Gaming Act bill provides for a massive expansion of gambling across the entire state of Illinois, including 15 land-based casinos and 6 race track-based video gambling casinos called “Racinos” in addition to the estimated 50,000 video poker machines already approved by the General Assembly last year.

“The almost unbelievable number of new gambling activities provided by the bill will enable the always ingenious Crime Syndicate to seek out myriad ways to enrich itself by getting into the legal gambling game,” Bilek added. ”The investigative arm of the Gaming Board will be overwhelmed by the large number of new gambling activities,” he said.

The bill actually mandates the Gaming Board to approve or deny licensees within 60 days of applications. With the number of new casinos, the number of new gambling positions and the dozens of changes and amendments to the existing gambling statutes, it will be virtually impossible for the Board to maintain the present integrity of Illinois gambling. “Interestingly, the bill is silent on adding or funding new investigators or staff for the Gaming Board,” Bilek commented.

To date, the Crime Syndicate has been kept out of legal gambling in Illinois through the unflinching efforts of the current Illinois Gaming Board.

“Pure and simple the bill is a set-up for disaster. If passed, law enforcement can expect the entrance of the Crime Syndicate into legalized gambling through a variety of ruses and deceptions,” Bilek warned. ”Federal prosecutors should plan for a constant stream of federal corruption indictments against government officials, gambling operators and members of the Crime Syndicate,” he added.

Specifics in the legislation include:

A giant casino in Chicago with 4,000 gambling positions, run by a separate, independent government entity called the Chicago Development Authority and not by the Illinois Gaming Board.

Four new casinos – Park City, Rockford, Danville and south suburban Cook County.

Six “Racinos” with video poker and electronic slot machines at the six race tracks in Illinois. The three tracks outside of Cook County would be allowed 900 gambling positions. Each of the three tracks in Cook County would be allowed 1,200 gambling positions.

A provision that allows all casinos to be land-based.

Dozens of other changes and amendments that advance the proliferation of gambling activities in Illinois.

The Chicago Crime Commission was founded in 1919 by 35 members of the Chicago business community and is the oldest and most respected citizens’ crime commission in the nation. The Chicago Crime Commission is a volunteer organization comprised of more than 200 businesses and professional leaders from the Chicago metropolitan area. For more information visit www.chicagocrimecommission.org.

Contact:

John Pastuovic
312-372-0101 X 240

SOURCE Chicago Crime Commission
http://www.chicagocrimecommission.org

S115K Atlantic City Casino Fines

$115K in Casino Fines for Cheating, Underage Cases
New Jersey set to fine casinos $115,000 in cheating, broken alarm, underage gambling cases

New Jersey casino regulators are set to hand out $115,000 in fines Wednesday to Atlantic City casinos who failed to immediately catch a cheating dealer and customer, had a malfunctioning alarm system that let a robber walk away with $8,000 after holding up a cashier, allowed someone other than the winner to fill out tax forms for five slots jackpots, and allowed underage patrons to gamble and drink.

The fines come as state lawmakers are set to consider a bill that would remove full-time inspectors from the casinos in order to let the gambling houses save money.

The biggest fine is against the Tropicana Casino and Resort for not immediately catching a dealer and a customer who had been cheating at a table game for seven months ending in May 2009.

According to documents filed with the state Casino Control Commission, which is to issue the fines, the Tropicana is accused of failing to adequately supervise a game of blackjack, failing to properly collect losing bets and pay off winning ones, and failing to detect cheating.

The case involves 20 to 30 occasions from November 2008 to May 2009 in which a Tropicana dealer admitted he overpaid a patron, or failed to take his chips when the customer lost a bet.

An unidentified patron notified a Tropicana security shift manager, who confronted the dealer and removed him from the game. He later confessed to the cheating scheme and was arrested.

It could not immediately be determined what eventually happened to the dealer or the customer, who were not identified in casino commission paperwork. The state attorney general's office could not immediately locate records on the case, and Tropicana officials did not respond to requests for comment.

Caesars Atlantic City was to be fined $10,000 for a July 2009 incident in which a silent holdup alarm malfunctioned twice, allowing a robber to get away with $8,000 in cash. The cashier hit a button activating the alarm, which was supposed to alert the security and surveillance departments, but it failed to work.

Trump Plaza Hotel Casino was to be fined $20,000 for allowing an underage player to gamble in September 2009. The 19-year-old man played slots, roulette, a card game known as Spanish 21 and blackjack. New Jersey's minimum age for gambling and drinking is 21.

The Atlantic City Hilton Casino Resort was to be fined $15,000 for allowing a 20-year-old Maryland man to play blackjack for 45 minutes in March 2010, and Trump Marina was to be fined $10,000 for record-keeping violations stemming from a February 2010 incident.

In that case, a man playing slots won five jackpots of $1,200 or more, each of which required a manual payout by casino personnel, who are required by law to fill out tax forms for the winner. The man showed a casino player's card that bore his friend's name, and filled out the tax forms in that person's name, according to records in the case.

Casino security located the friend, who claimed to have been the real winner of the jackpots, and then filled out a new set of tax forms as casino security destroyed the original tax forms, according to documents in the case.

And the Trump Taj Mahal Casino Resort was to be fined $20,000 for allowing a 20-year-old woman to play slots and drink in May 2010.

The casinos involved all either declined to comment or did not respond to requests for comment.

Later this month, the state Assembly is expected to consider a deregulation bill that would entrust the casinos to police themselves to a much greater degree than they do now. It would, for example, eliminate a requirement that at least one state inspector be on the floor of each casino 24 hours a day.

Those proposals have drawn fire from critics who fear it would open the door for more criminal acts to occur in the casinos. But the gambling halls strongly favor the proposed changes, saying they are paying for unduly restrictive supervision that is hurting their bottom line.

In an interview last week with NJN, the state-run TV network, two former New Jersey governors said it would be a bad idea to water down regulation of Atlantic City's casinos.

"When I signed the law, I told the mob to stay out of Atlantic City," said former Gov. Brendan Byrne, a Democrat. "There's a big pile of money in Atlantic and since Biblical times, where there's money there's corruption. And we've got to watch out for it. The regulations we have in place are working."

Former Republican Gov. Thomas Kean agreed.

"Gambling is corrupt in a number of places," he said. "Not in New Jersey, because this governor put in good solid regulations to make sure it didn't happen in New Jersey. You start to ease those regulations, and we'll have corruption, corrupt gambling like we do in so many other places. It's too big a pot of money and it's gonna attract flies. And the worst kind of people, and so I think we ought to keep the regulations strong."

The deregulation bill has already passed the state Senate.

Gambling Addict Steals $38K from UPS Store

Woman pleads not guilty to stealing $38K from Missoula UPS Store

A woman charged with stealing nearly $40,000 from The UPS Store in downtown Missoula over a five-year period pleaded not guilty in District Court on Tuesday to two counts of felony theft.

Kathy Linde Bordner, a former employee, wrote checks on her children's bank accounts to cover daily cash withdrawals, altered the business's bank deposits and pocketed cash payments from customers to feed her gambling addiction, court records state.

The business's owner, Laura Vercruyssen, began investigating Bordner's activities after a customer complained of receiving failure-to-pay notices from the store. That customer repeatedly asked to see Bordner, believing her to be the owner.

Last May, Vercruyssen met several times with Missoula police officers, who recommended she try to document the thefts.

Within two days, Vercruyssen found evidence of around $6,000 having been stolen, court records state. Officers then advised her to hire a forensic accountant for a thorough vetting of her books.

The accountant, Heidi Foley, not only determined how much had been stolen - $38,861 - but also how it disappeared from The UPS Store till.

Among the schemes outlined in court records:

•Bordner allegedly used checks from her family's accounts, including her children's, to cover cash taken from bank deposits, or used customer checks she had been holding. That accounted for $8,977.
•Bordner allegedly wrote a high number of "cash paid outs" from the store till. Normally used for lunches or small office supplies, those payouts amounted to $2,868.
•Bordner allegedly falsified numerous returns and discounts paid to customers for merchandise and shipping services, when in fact the inventory was dwindling and the packages were shipped. That amounted to $14,729.
Interviewed by police, Bordner admitted to numerous incidences of theft, and claimed she had a severe gambling problem she was trying to hide from her husband.

Guest robbed at Seminole Hard Rock

Three arrested after chase
May be tied to Seminole Hard Rock robbery

LARGO - Pinellas County deputies arrested three people after a brief chase Tuesday morning.

An on-duty deputy spotted a car on Ulmerton Road that matched the description of the car involved in a Sunday robbery at the Seminole Hard Rock Hotel and Casino in Tampa. The deputy attempted to stop the vehicle, but the driver took off.

The deputy chased the car for several minutes before it abruptly pulled over at Tall Pines Drive and Whispering Drive. The three people inside jumped out and ran off.

Deputies conducted an extensive search and later found the three at one of the men's apartments in the 3000 block of Pine Drive.

So far, 20-year-old Jamal Boatwright, 19-year-old Sebastian Williams, 23-year-old Ricky Ferguson have only been charged in relation to fleeing from law enforcement, including resisting arrest without violence. Williams was also charged with violation of probation for two other crimes.

Pinellas deputies are working with the Seminole Police Department at the Hard Rock to determine if the three suspects are the same men who robbed a guest in the hotel and casino's parking lot.

Fall River, turn this ship around

Fall River, turn this ship around

It's time for Fall River to make the right choice and embrace a UMass biotechnology facility at the location originally proposed.

Mayor Will Flanagan is reconsidering endorsing the plan, thwarted earlier this year when the Fall River Redevelopment Authority, with Flanagan's support, agreed in principle to sell the land to the Mashpee Wampanoag for a casino.

Major developments the week before Christmas should finally turn the tide of opinion among city officials.

On Dec. 21, a state appeals court judge upheld an injunction blocking the Redevelopment Authority from selling the land to the Wampanoag. The Herald News reported that in response to the decision, Flanagan was considering other options for the land, including the biotechnology park for which UMD would be the anchor tenant.

The following day, UMass Dartmouth Chancellor Jean MacCormack warned the university might drop its plans altogether rather than choose an alternative site. Alternatives in New Bedford, Fall River and Dartmouth have "constraints," she said.

Even before the appeals court decision, far too many obstacles stood before the casino plan: State law designates the land for industrial development and specifically prohibits a casino; casino gambling remains illegal in Massachusetts; and a 2009 Supreme Court decision effectively prevents the Mashpee Wampanoag from taking the land into trust.

A casino would bring jobs to Fall River, but gambling would also siphon money from city residents who can ill afford it.

The city has long expressed a desire to expand residents' skill base, but casino jobs don't truly do that; they maintain the illusion that not getting a college degree is a viable strategy for the next generation. If a casino goes bust, then what? Wait for another big employer of low-skilled workers to come along?

Fall River needs to get with the program and recognize that even if the biopark brings fewer jobs, those jobs will do much more for the long-term economic health of the city. Those jobs will help bring the Fall River economy into the 21st century — and not a moment too soon.In addition, the entire region, of course, would benefit from a growing biotech industry.

If Flanagan and the Redevelopment Authority are looking to save face, how about this: Welcome the biopark with open arms, and make the commitments UMD will now require in writing (since the university got burned on the handshake last time around). Circumstances have changed. The prospects for a casino look more doubtful than ever. So who could blame city officials for changing their minds to accommodate a new economic reality?

Flanagan and the authority can take credit for being nimble enough to respond to changing circumstances — whatever it takes, as long as they do the right thing.

This is not a game

This is not a game

By Professor Fred Gottheil
University of Illinois

Marion, Ill. — Hockey is a game. Chess is a game. Placing a $50 bet at the blackjack table in a casino is not a game. It is unadulterated gambling even though casinos insist that they're part of a gaming industry. But mislabeling is not the industry's only offense. In fact, it's insignificant compared to the damage the industry inflicts on the communities it invades. The industry feeds on the vulnerable, not unlike the narcotic pusher at high-school playgrounds. It promises nirvana but delivers despair. You've seen the industry's commercials on television and on billboards in town. There is no truth-in-packaging here.

What is particularly distressful about the gambling industry is that it has captured local and state governments by agreeing to share its gambling spoils. These governments close their collective eyes to the harm the industry commits and see only gambling-derived tax dollars flowing into their revenue coffers. Some state and local governments even vie for the right to inflict on their constituents the psychological, social, and economic pain generated by commercial gambling.

To be sure, a $50 blackjack bet may be no more than a plaything to a dentist on vacation who decides to spend an evening at the casino. After all, gambling is not an activity that defines his life or even his leisure hours. It's a once-in-a-while venture, a trip to the other side, so to speak. Moreover, his $50 or even his $150 loss at the tables represents no more than an expensive meal at a fine restaurant. And it is certainly small potatoes compared to his $240,000 annual income. In truth, there are a lot of folks - men and women - like him at the casinos; getting a rush at the roulette wheel, the blackjack table, and the slot machine. Few expect to go home winners and few do. So what's the beef?

The problem is not the once-in-a-while-at-the-tables dentist. It is instead the very many more who are not dentists, who do not earn $240,000 annually, and who are at the tables far more than once-in-a-while. They're encouraged to live on false hope, bet after bet, loss after loss. If they make that $50 bet, say, once a week, for just 30 weeks a year, that adds up to a $1,500 annual loss. If their annual income is $25,000, that loss represents six percent of their annual income. Suppose the government collects 20 percent of that $1,500 loss. That's equivalent to $300 of tax revenue. It's a government windfall that masquerades as a tax on the casino. Of course it's not. It's a tax on the people.

But that $50 illustration understates by a long shot - pardon the metaphor - what really goes on at the casino. What if the gambler bets and loses not $50 but $100 a week? We're not yet in a world of fantasy, are we? Now you do the math. That eats up 12 percent of the gambler's $25,000 annual income. Getting serious? I think so and I think you might think so as well. And we haven't touched the issues associated with the pathological gambler who will often bet away the food from his or her family table, if not the table itself.

Gambling is a cruel example of a regressive tax. The richer the gambler, the less percent of his or her income is gambled away by a $50 bet. Conversely, the poorer the gambler, the greater is that $50 bet burden. That is to say, gambling is a rather destructive hidden tax that weighs more heavily on the poor.

Governments try to camouflage its destructiveness on lower-income people by claiming to earmark gambling-derived revenues to spending on public education, public safety, and public parks. But it's illusory. What that earmark often does is free up revenue to bloat non-basic government spending. In fact, our mounting state debt is used as an excuse to invite in casino operators.

The gambling industry also insists that casinos create employment and income. That, too, is sheer nonsense. Imagine a father facing two options: (1) going to the casino and betting away $100 at the slot machines or (2) taking his daughter to a baseball game, where he buys $100 of tickets, hotdogs, drinks and souvenirs. The employment and income he creates at the casino is only employment and income lost at the ball game. It's strictly a matter of what kind of employment and income the $100 generates.

Is gambling a serious drain on the economic well being of low-income people? Look at the data. A decade ago, the bipartisan U.S. National Gambling Impact Study Commission sponsored by U.S. Senator Paul Simon found that 80 percent of gambling revenue was derived from households earning less than $50,000 annually and gamblers with annual incomes below $10,000 spent almost three times as much on gambling - in dollar amounts - than did those with incomes exceeding $50,000. And what was the government take? These essentially low-income gamblers had to lose $84 billion to casinos and lotteries for the participating state governments to rake in $24 billion of new revenues. While it may not be criminal in a legal sense, it's a national disgrace nonetheless.

But disgrace or not, the gambling industry legitimately argues that there is a serious philosophical issue lurking in the background on any discussion of gambling. They refer to the matter of individual free choice; the exercise of our liberty to make whatever choices we wish; whether those choices end up being good ones or bad. After all, many of us choose to eat too much or drink too much, or work too little, or study too little; all with potentially dire consequences. Should we disallow, then, someone from gambling away life savings or the family farm even if the gambler willingly chooses to make the bet? It's a tough question, to be sure. But it's not something societies haven't grappled with in other instances.

For example, we do insist that workers contribute to social security even though many would prefer to chance retirement on their own. We do insist that children attend school even though some families might prefer them not attending. We do insist that all airline passengers be scanned at airport security checkpoints even though a few - insisting on their individual rights - would be willing to chance it. And to the chagrin of some, we make illegal the market for cocaine and heroin In these cases, as in many others, communities weigh the consequences of allowing or disallowing activities that they believe are in the long run beneficial or harmful to not only participating individuals but to the communities they live in as well.

Which brings this gambling issue home to the State of Illinois? The December 1 vote in Springfield to create 13 new casino facilities statewide is a challenge that citizens of Illinois must accept. Enormous pressure has been exerted by the gambling industry on a somewhat compliant Illinois Senate to vote in favor of adding more gambling casinos in Illinois. Consider one innocent-enough location: Danville, Illinois. Why target Danville? Because the gambling web there is extensive. Not only are there many towns and villages within a 50-mile striking distance - including Champaign-Urbana - but there are 36,000 University of Illinois students just 35 miles away, not to mention thousands of students at Parkland College, Danville Community College, and Wabash College. That kind of population had to be on the minds of the casino planners. Paul Simon's Study Commission noted that college students are twice as likely to get hooked into a gambling addiction than are other adults. The gambling industry does its homework well. It knows where to hurt.

Admittedly, Danville, like the dozen other targeted communities, is a luscious plum ready for the picking. But will the gambling industry succeed? It depends on our reaction, our voices, our remembering who in our government voted which way. What appears to be nothing short of amazing is that only a month after our national, state, and municipal elections were held in which candidates were claiming to fight for the interests of their communities, re-elected members of the Illinois Senate - many liberal-professing - voted for this major gambling expansion. Governor Quinn has so far indicated that he opposes the casino expansion. We must hold our representatives accountable.

Professor Fred Gottheil
Department of Economics
University of Illinois

Jan. 9th Save the Date!

From our friends at Stop Predatory Gambling:

The national news program 60 Minutes has been working hard for a long time on a segment about predatory gambling in America with a specific focus on electronic gambling machines. The segment is tentatively scheduled to air Sunday evening, January 9th. We are organizing “60 Minutes parties” across America for that night to help intensify the national spotlight on this major issue. We are organizing at least 100 parties across the country and they can be as big or as small as you’d like. We are asking you to invite your family, neighbors and friends to your home, your church or any other location you prefer that has a television and a few seats about 30 minutes before the show begins in your time zone.

If you are willing to make a difference by hosting a party or co-hosting a party at another location, please let us know by email or phone. We will provide: a sample invite (click here for the text of sample invite) and a draft press release the week before the air date to send to the CBS affiliate in your region, as well as any other media you think should have it. If CBS changes the broadcast date, we will notify you a.s.a.p. and we will move the parties to the new date.

As you know, predatory gambling is a major issue that has received very little scrutiny by the national media up to this point. 60 Minutes has boldly taken it on. The more we can encourage people to watch it, the more of a difference it will make toward getting our country in the right direction.

Thank you!

Best,

Les Bernal
Executive Director
SPG Foundation

Gambling Addiction: W.Va. man arrested on fraud charges

W.Va. man arrested on fraud charges

North Strabane Township police have asked for federal assistance in the investigation of a Morgantown, W.Va., man they arrested Wednesday on suspicion of stealing a large sum of money with stolen credit cards in several states.

Township police arrested Jaynesh Umesh Patel, 28, in the poker room at The Meadows Racetrack & Casino after being alerted to his alleged use of stolen credit cards at a nearby motel, court records show.

Patel confessed to obtaining the credit cards from a number of customers of motels owned by his parents in the Morgantown area, and also to having a gambling problem, township police Officer Christopher Wilson said.

Wilson said he had yet to determine how much money had been stolen in the scheme, and that he would seek help with the case from the federal Financial Crimes Task Force. He also said he plans to file additional charges next week against Patel for allegedly using stolen credit cards at other township businesses.

Police began investigating him about 11:15 a.m. upon receiving a phone call from the controller at the Holiday Inn Meadow Lands reporting fraud.

The controller, Diane Travani, said she had received a call from a fraud investigator with Citibank Financial that charges of $144 had recently been made at the motel restaurant and to reserve a room there on a credit card stolen from John P. and Eleanor Pless, police stated in the affidavit.

Patel had already checked out of the motel and taken a shuttle to the casino, where he was waiting for a letter in the mail due to arrive at the Holiday Inn.

Patel was taken into custody and charged with access device fraud, forgery, receiving stolen property, theft and identity theft. He was placed in Washington County Jail on $40,000 bond set by District Judge Jay Weller.

Weller said he seized the passport of Patel, who is of Indian descent and entered the United States through Canada.

Pennsylvania: Meadows trial canceled

Trial canceled in $430,000 theft from Meadows Casino

Two Swissvale men arrived at the Washington County Courthouse Monday in anticipation of jury selection for their trial on charges they swindled nearly $430,000 from the Meadows Racetrack & Casino in 2009.
But, by day's end, one of the men was en route to Las Vegas to face federal charges, and the other man pleaded guilty to his role in the Meadows plan.

Andre Michael Nestor, 39, and his roommate, Kerry Laverde, 51, were set to face trial on more than 650 felony counts each of theft, receiving stolen property, criminal conspiracy, computer trespassing and other charges. They were accused of using a software glitch in a slot machine at the casino to generate false jackpots.

However, FBI agents arrested Nestor early in the morning as he waited for jury selection to begin before Judge Janet Moschetta Bell. He was immediately taken from the courthouse by federal agents.

Although details of the Nevada allegations against Nestor were not released, District Attorney Steven Toprani said it was his understanding that Nestor was likely part of a larger scheme in Nevada that resulted in the theft of more than $1 million.
The trial for which a special panel of 61 potential jurors had been summoned was subsequently put on hold pending plea negotiations between Toprani and Laverde's attorney, Patrick Thomassey. A deal was subsequently reached, and at 1:30 p.m., Laverde appeared before Moschetta Bell and pleaded guilty to three misdemeanor counts of receiving stolen property.

In exchange for his plea, Laverde was sentenced to three years of probation and ordered to forfeit all money that was seized by police from lock boxes and bank accounts that he had in his name and at the house he shared with Nestor. Laverde also forfeited a vehicle that he purchased in 2009 using money that was stolen from the casino.

Toprani, Thomassey and Meadows Casino vice president and general manager Sean Sullivan told the judge that the seized money and the vehicle covered full restitution for the theft that totaled $429,945.

Sullivan also said he was satisfied with the plea arrangement. "I'm proud to see this justice served and to move forward," he stated.

Prior to the sentence being issued, Thomassey told Moschetta Bell that he believed the plea arrangement was fair, especially since Laverde "was not the driving force in this case."

The men were arrested following indictment by the Washington County grand jury.

The men visited the North Strabane Township casino 14 times over two months beginning in June 2009, posing as "high rollers."

According to the grand jury presentment, Nestor was the central figure in the scheme, first arriving at the casino June 22. Over the next two months, he represented himself as a legitimate player and gained casino employees' trust by giving sizable tips and being courteous to staff.

Laverde, who formerly was employed as a police officer in Swissvale, posed as security for the seemingly wealthy Nestor and wore a policeman's badge when dressed in plain clothes.

A third man charged in the theft, Patrick Loushil, 43, of Brookline, pleaded guilty last week to a misdemeanor charge of unsworn falsification and was set to testify against the other men in exchange for probation. More than 300 criminal charges against him were dropped.

The presentment said Loushil's involvement was as an accomplice to the theft and fraud in that he claimed false jackpots for Nestor and collected a substantial amount of money on Nestor's behalf, even signing IRS W-2 forms evidencing his receipt of funds.

Officials said the trio played a variety of machines at the casino but drew their fraudulent winnings from a single "Draw Poker" video slot machine. They were able to cause a casino slot technician to unwittingly adjust the machine's software. Casino employees on duty at the time did not notice the adjustment, and the machine was available and open for public play.

Thomassey commended Toprani for his handling of the case, especially since there was no Pennsylvania statute specifically dealing with such a crime. Having been a district attorney in Allegheny County and having grand jury experience, Thomassey suggested to Toprani that the grand jury file a report and send it to the Legislature so that it may come up with laws dealing specifically with casino crimes of this sort. [Pennsylvania legislators passed legislation at midnight on the Fourth of July which contains other omissions, including their failure to address children being left in vehicles.]

Toprani responded by stating that the Senate began making changes to the law following the county's investigation. "They've made positive changes. And we are better for that," he said.

2 officers quit over corruption allegations

2 Pelham officers quit over corruption allegations


PELHAM, Ga. -- Two police officers in Pelham have quit their jobs rather than face charges that they were involved in illegal gambling.

Pelham Police Investigator Rod Williams told WALB-TV that Capt. Linda Coliman and Sgt. Mary Johnson decided to resign their posts. It spared them possible prosecution over allegations that they worked security at an illegal gambling operation outside a gas station.

Coliman and Johnson were not charged with a crime, and they denied wrongdoing. A man who answered the phone at Coliman's home said she [sic] didn't want to talk. A phone listing for Johnson could not be located.

The case came to light last month when Pelham police arrested four men for running a gambling operation that looked like a mobile carnival.

Hawaii: $23 million fraud financed gambling junkets

Hilo Prosecutor’s ponzi brother pleads guilty in state -Feds Indict last week
By Dwight Kondo

Telling of Hawaii’s business environment – One week following the conviction of Maui ponzi-scammer, Lloyd Kimura, younger brother of Hawaii County Prosecutor, Jay, the Hawaii Better Business Bureau still ranks his bankrupt and criminal finance company with an “A+” rating. Well, that’s how things work here in Hawai’i Nei.

Kimura pleaded guilty to two counts each of engaging in prohibited securities practices and making false or misleading financial statements to the state Department of Commerce and Consumer Affairs’ Financial Institution Division.

Kimura has agreed to accept the mandatory 20-year prison term for the securities fraud charge and maximum five-year prison term for the false-statement charge when Circuit Court Judge Joseph E. Cardoza sentences him in February, said Chris Young, deputy state attorney general.

Unlike the BBB, the Hawaii U.S. Attorney Florence Nakakuni, following his conviction in state courts, filed federal charges against Wailuku ‘businessman’ Kimura, alleging mail fraud, bank fraud and theft from an employee benefit plan. The charges were made in the last days of 2010.

Also very noteworthy is the fact that no major news outlet makes a link between Lloyd and his Hawaii County Prosecutor brother Jay. What is important to note is that the criminal practices by the younger Kimura were indulged during the whole time his brother was putting people in jail for much lesser crimes on another island. The feds report that Kimura’s ponzi scheme started in 1986 and continued until November 2010.

Also, the BBB’s ‘bum steer’ ”A+” ratings given to Maui Industrial Loan and Finance Company, owned by Kimura, even though both declared bankruptcy in January 2010. Much of the unsecured liability Kimura listed — $16.2 million — is duplicated in Maui Industrial Loan & Finance’s filing with the U.S. Bankruptcy Court then.

A whole year has gone by and the Better Business Bureau still has not downgraded MILF Co.’s “A+” as of 0945-010311. (See below)

Also first linked here at Hawaii News Daily. Com. was a report by Pacific Business News concerning Lloyd Kimura’s remedy for stress. “As many as four times a year, the Hawaii native trades his office chair for a seat inside the Indian casinos dotting the California desert. 
“A week max,” Kimura says of his trips to the mainland. “It forces my mind to focus on something other than work.”

Is the Hawaii Better Business Bureau's bum steer still posted? go see: http://tinyurl.com/25oex

PBN reported that this habit was to relieve his “stress” and did not mention the relieving millions of OPM. That’s Other Peoples’ Money.

What is out there and may soon be reported is if older brother Jay tagged along with his ‘more successful’ brother on any of these “stress”-relieving binges to the California Indian casinos spending other peoples’ hard earned wages.

According to The Star/Advertiser:

The federal charges say Kimura “assured investors that loans made by MILFCO were secured, or ‘guaranteed,’ with collateral or liens on property.” But instead of making loans, money from investor/depositors was put into bank accounts, prosecutors allege.

Instead, Kimura used money from new investors to pay off earlier investors and even sent false financial statements, according to federal court records. That by definition is a ‘Ponzi Scheme”.

Federal prosecutors said that at no time was Maui Industrial Loan and Finance licensed by the state to accept deposits.

Kimura also made false statements to obtain lines of credits from two banks and stole $640,000 from the Lloyd Y. Kimura, CPA, Inc. Retirement Trust Account and 401K Profit Sharing Plan, federal court records say.

In addition to Maui Industrial and his accounting company, Kimura owns Wailuku Tire Center. http://tinyurl.com/25qsp5k

Pacific Business News also reported:

“Because his wife, Jennie Kimura, did not file for bankruptcy, the properties are
 not part of the bankruptcy estate because they are owned by the Kimuras as 
tenants by the entirety, Wagner said. “Everything that he has that’s in his estate will be liquidated,” Wagner said. “In order to keep [the nine properties] he still has to pay the mortgages on them or else they’re subject to foreclosure.”

The loan company has about $4 million in receivables, but $3 million was from Kimura, who apparently borrowed the money from the (his own) loan company, Wagner said. The remainder is loans issued to customers, whose payments are now being collected by the trustee. Kimura, who also is a certified public accountant, listed $4.25 million in 
assets, the bulk of that in real estate. He owns 10 properties, but is claiming exemption for nine of them, including his home and the office building, because they are jointly owned with his wife.”

Tags: $23 Million Stolen on Maui, Convicted $23 million ripper Hilo prosecutor's brother, Dwight Kondo, Feds Indict Maui Ponzi Scammer, Hawaii Better Business Bureau, Hawaii County Prosecutor Jay Kimura, Lloyd Kimura pleads guilty in Maui for lying to stae

Banning Gamblers

The Massachusetts House of Representatives barely passed the self-exclusion amendment which is not uncommon in other states and countries. Maybe it was an effort to please the Speaker who's pretty cozy with the Industry or a failure of members to inform themselves of surrounding issues.

What is rather interesting in the article below is the lengths to which others are willing to go to protect families and expedite a sensible solution.


Casino exclusion orders to be approved faster

FAMILIES will now be able to get their relatives with gambling problems barred from casinos, just two weeks after they apply for it.

This comes after changes to the application process by the National Council of Problem Gambling (NCPG).

Acting on feedback that six weeks was too long, the NCPG has more than halved the processing time by ensuring that a hearing date is set for each case once someone contacts the council for a family exclusion order.

Earlier, families and subjects of the exclusion order would have to go through counselling, and have a detailed 25-page report on their circumstances submitted before a hearing date could be set.

This part of the process is often the most time-consuming, said Tanjong Pagar Family Service Centre senior counsellor Charles Lee, because problem gamblers can be uncooperative and delay the hearing by skipping appointments.

With the new process, a hearing date is set even before the counselling is done, and regardless of whether the gambler turns up or not, a decision can be made based on the family's input.

Corruption and moral decay

From the Maine Family Policy Council

“The Alabama case is another example of the culture of corruption and moral decay surrounding legalized gambling,” said Carroll Conley, executive director of the Christian Civic League of Maine.

Ex-Lobbyist in Alabama Pleads Guilty in Bribery

Jarrod D. Massey, a former Alabama lobbyist at the center of a bribery scandal that has shaken the state government, pleaded guilty on Monday in federal court in Montgomery, Ala., to conspiring to pay state lawmakers in exchange for their votes for pro-gambling legislation.

Mr. Massey is the first defendant to plead out of 11 who were arrested in October in connection with a federal bribery investigation, a group that includes two current and two former state senators as well as two powerful businessmen. In September, Jennifer Pouncey, a lobbyist who worked with Mr. Massey, pleaded guilty to a conspiracy charge in connection with the case.

The trial of those who were arrested is expected to begin in early April.

Before his indictment, Mr. Massey worked for the owner of a large entertainment resort in southern Alabama that was to include so-called electronic bingo machines, the subject of intense debate in the state. In his plea, Mr. Massey admitted that he was involved in offering or paying bribes to all four lawmakers who were arrested, on the understanding that they would support legislation that would help the resort.

The bribes and proposed bribes, some of them more than $1 million, were in the form of campaign donations, purchases at businesses owned by the lawmakers or disguised payments for public relations work.

Mr. Massey faces up to five years in prison for one conspiracy charge and up to 10 years in prison for each of five federal bribery charges, prosecutors said. He could also face over $1 million in fines.

The October arrests led in part to a special session of the State Legislature this month, which passed seven bills as part of an ethics reform package. Gov. Bob Riley signed the ethics bills into law on Monday.

Illinois Feeding Frenzy About to Begin

"Crew" About To Descend On Springfield To Lobby On Gaming Bill

As Des Plaines Mayor Marty Moylan says it, "a big crew" of lobbyists and other interested individuals will descend on state capital Springfield Monday, Jan. 3, to advocate for and against major legislation dealing with everything from workmen's compensation to an income tax hike.

Right at the top of the heap of proposals is the massive gambling package that calls for five new casinos in the state---including one in Chicago---and gaming devices such as slot machines at the state's six horse race tracks. Des Plaines' interest in the legislation is enormous because around July or August Illinois' 10th licensed riverboat casino is scheduled to open on River Road near Devon Avenue. Should all or a major part of the proposed gaming expansion bill pass, it could have a profound effect on the amount of annual income the Des Plaines casino generates for the city and the operation's owner, Midwest Gaming and Entertainment, LLC. Should more casinos and "racinos" be added, Moylan and Midwest believes it will dilute the annual revenue the Des Plaines casino and the other nine casinos in Illinois generate by millions of dollars per year.

In November, the Illinois Senate passed the huge gaming expansion bill as proposed by State Senator Terry Link of Vernon Hills. Now the measure moves on to the Illinois House where a vote on the matter needs to be taken before the new General Assembly is sworn in to office in about a week. If the bill isn't acted on, legislators will have to introduce new legislation after the new officials are sworn in to office if they want to pursue gaming expansion.

The Illinois Feeding Frenzy is about to begin.

Instead of sound fiscal policies to re-build a sustainable economic base, lawmakers seek the false solution of expanded gambling on which to expand the House of Cards they've constructed.

Careful! There aren't many discretionary dollars left to suck from the pockets of the poor!


My apologies to the vultures who feed to survive, unlike the Casino Vultures who feed their own greed, to the detriment of taxpayers.

Pennsylvania: Crime, Corruption and Indictments

A special place in history is deserved for Pennsylvania's participation in the creation of our Republic, yet lawmakers desecrated that reputation when they passed casino legislation at midnight on the Fourth of July. Included in that legislation was a removal of local control. [Casino-Free Philadelphia has successfully protested that travesty.]

In what seems like a free-for-all of criminal acts, a 2010 recap is below:


Top stories of 2010

Voters choose home rule as antidote to corruption

First corruption, then change.

Luzerne County voters in November adopted a home-rule charter that ditches the county’s current government structure, blamed in part for rampant corruption and cronyism, and replaces it with a radically different council-manager form of government.

The charter, which takes full effect on Jan. 2, 2012, replaces the three commissioners who have long served as chief decision-makers for the county with an 11-member legislature and an appointed full-time manager who will run an executive branch of county government.

Supporters of the home-rule movement blamed the current form of government, set under state law, for multiple shortcomings, including corruption, cronyism, patronage hiring, wasteful spending, higher property taxes and out-of-control debt.

Home-rule critics compared the new legislative council to a public school system’s board of education and the manager post to an all-powerful school superintendent.
Commissioner Stephen A. Urban, whose position is being eliminated under the charter, complained the appointed manager would be “a monarch” and the council “a rubber stamp.”

Another critic, Prothonotary Carolee Medico Olenginski, sued the county in December and the commission that crafted the home-rule charter, claiming the new form of government unconstitutionally forces her office into the expanded executive branch.
Luzerne County is the seventh county in the state to adopt a home-rule charter.

Voters rejected home-rule proposals in 1974 and again in 2003. But this year’s vote came in the aftermath of a massive corruption investigation that since January 2009 has led to criminal charges against a slew of county officials — including three judges, a county commissioner, a clerk of courts, a deputy chief clerk and a director of human resources.

Corruption probe puts Musto’s legacy on line

The November indictment of retiring longtime state Sen. Raphael J. Musto signaled a new direction for a federal corruption probe that had tallied scores of arrests in county and local government, including judges, commissioners, school board members and contractors.

The indictment, charging the 81-year-old legislator with taking more than $35,000 in cash and gifts from a real estate developer who received millions of dollars in government funding, marked the expansion of the probe into state government and cast a pall on Musto’s retirement.

Musto, facing up to 10 years in prison with a conviction, pleaded not guilty at his arraignment earlier this month and said he looks forward to a trial and his “day in court.” Musto has maintained the same posture since federal agents raided his Pittston Township home in April.

“I stepped on a lot of big toes over the years,” he said after the raid.

Musto’s day in court could come in February, around the time another corruption figure, former Luzerne County Judge Mark A. Ciavarella Jr., faces trial on a 39-count racketeering indictment stemming from a $2.8 million dollar kids-for-cash kickback scheme.

Ciavarella’s co-defendant, ex-Judge Michael T. Conahan, pleaded guilty to racketeering in July and has said he would be willing to testify against Ciavarella.

Another former judge, Michael T. Toole, pleaded guilty in November to charges he accepted an illegal gratuity by using an attorney’s beach house free of charge, and failed to pay taxes on a $30,000 “finder’s fee.” He is scheduled for sentencing in February.

More than a dozen other corruption figures also passed through the court system in 2010.

Former Luzerne County Commissioner Greg Skrepenak started a two-year prison sentence in September for kickbacks.

The county’s former human resources director, Doug Richards, is scheduled to start a 15-month sentence in February for taking bribes to secure a no-bid county contract for a mysterious consulting firm.

Ex-Pittston Area School Board member Joseph J. Oliveri and contractor Richard Emanski, are nearing their end of their terms.

William G. Brace, who accepted a custom-tailored $1,500 suit from a contractor while the county’s deputy clerk, completed a three-month prison stay in August.

Jeffrey J. Piazza, the former Wilkes-Barre Career and Technical Center administrator, completed a six-month prison sentence in October for pocketing “hidden kickbacks” from a contractor.

Others avoided jail.

Former Wilkes-Barre Area School Board President Frank Pizzella Jr. turned cooperation into probation for directing a $5,000 payment to a board member who helped his nephew secure a teaching job.

Former county redevelopment authority director Allen Bellas, former Jenkins Township Supervisor Russell E. Arnone and former Butler Township resident Craig Stirling, a former technology director, were also sentenced to probation for their involvement in bribery and kickback schemes.

Wilkes-Barre nightclub owner/restaurateur Thom Greco was sentenced to two years of probation and ordered to serve community service for failing to tell federal agents Skrepenak shook him down for more than $10,000 worth of televisions.

Former County Clerk of Courts Robert F. Reilly received a similar sentence for lying to federal agents about payments he received from a contractor. The contractor, Barton Weidlich, is awaiting sentencing on a charge he threatened a government witness.

William Maguire, the retired Wilkes-Barre police detective who pleaded guilty to accepting a $1,400 bribe while a member of the county housing authority board, and Patrick Patte Jr., the prominent bar owner accused in an illegal betting ring, are both scheduled to learn their sentences in 2011.

Christopher Marion, of Archbald, and Mark Fino, a bar employee, pleaded guilty in to charges stemming from their involvement in the gambling ring, and were each sentenced to two years probation.

Political upheaval

In this year of political upheaval and change, a slate of longtime legislators with decades of service in Washington or Harrisburg were ushered out of office, defeated in re-election bids or retired amid controversy.

Paul E. Kanjorski, D-Nanticoke, a member of Congress for 26 years, lost in November to three-time foe Lou Barletta, the Republican mayor of Hazleton. Barletta’s victory and former U.S. Rep. Tom Marino’s win over two-term Democrat Chris Carney in the 10th District solidified the region for Republicans.

Raphael J. Musto, who served 28 years in the state senate, entered retirement days after a federal grand jury indicted him for taking $35,000 in kickbacks from a local developer. State Rep. John Yudichak won an open election to fill the seat and will be sworn in on Tuesday.

Robert J. Mellow, D-Archbald, announced his retirement after 40 years in the state Senate, months before federal agents raided his home and office. John Blake, a former top official with the state Department of Community and Economic Development, won an election to replace Mellow.

At courthouse, times are changing

The stains of corruptions left from the arrests of three Luzerne County judges in 2009 were slowly removed this year with the installation of two newly elected judges, three interim replacements, the reversal of tainted decisions and the implementation of judicial reforms.

Judges Tina Polachek Gartley and William H. Amsbury, elected in November 2009, joined the bench in January.

Later in the month, attorney Joseph M. Cosgrove, an advocate for indigent defendants and death-row inmates, was sworn in to fill the seat vacated by Judge Mark A. Ciavarella Jr. in the wake of a corruption scandal.

Two other interim appointees, long-time attorneys Joseph J. Van Jura and Lewis W. Wetzel, joined the bench in March, filling seats previously held by Michael T. Toole, who has pleaded guilty to corruption charges, and Peter Paul Olszewski Jr., who lost a retention election.

In May, a state panel investigating a kids-for-cash kickback scheme in the county’s juvenile court issued a scathing report pinning blame on criminal judges, passive prosecutors, inattentive public defenders and the county’s long history of “conflict and corruption.”

The Interbranch Commission on Juvenile Justice issued more than 40 recommendations for statewide reforms, including an overhaul of the state Judicial Conduct Board, which failed to investigate allegations that a judge involved in the scandal associated with a mob figure.

Commission Chairman John M. Cleland, a judge on the state Superior Court, said the scandal resulted from a “total collapse” of every “check and balance” in the county court.

State legislators have pledged to implement the commission’s reforms, including attorney representation for each juvenile defendant, a state fund to compensate victims of juvenile crimes and grants to agencies that provide victim services.

In addition to the fixes juvenile in the juvenile system, appellate courts reversed decisions in at least four civil cases tainted by corruption.

The state Superior Court in November overturned a $3.4 million legal malpractice verdict returned in Ciavarella’s court, saying his ties to a plaintiff’s attorney clouded the case with “judicial impropriety.”

The state Supreme Court in June vacated a ruling in a land dispute issued by Ciavarella in favor of First National Community Bank because of ties between the Dunmore-based bank and Ciavarella and his co-defendant in a corruption case, Michael T. Conahan.

The rulings followed a state Supreme Court decision last year overturning a $3.5 million verdict against The Citizens’ Voice after evidence surfaced that Conahan colluded with reputed mob boss William “Big Billy” D’Elia to steer the case to Ciavarella — assuring a favorable verdict for plaintiff Thomas Joseph, a D’Elia associate.

Wynn fights return of fraudulent debt payments

Wynn fights demand for return of gambling debt payments

The bankruptcy liquidator for an Illinois company tainted by fraud is encountering resistance in his efforts to recover millions of dollars he says was wrongly sent to Las Vegas casinos to cover gambling debts.

The liquidating bankruptcy plan administrator for Equipment Acquisition Resources Inc. of Palatine, Ill., William Brandt Jr., filed suit in October in bankruptcy court in Illinois against Wynn Las Vegas, the Luxor, the Rio and Harrah's hotel-casinos — all on or near the Las Vegas Strip.

The suits charge Equipment Acquisition Resources (EAR) sent checks to the casinos to cover gambling debts for EAR executives including Sheldon Player, his wife Donna Malone and Mark Anstett. Those executives all left the company before or as Brandt took over.

EAR, which claimed to be in the semiconductor machinery sales business, was forced to file for bankruptcy in October 2009 after it "engaged in a massive fraud by which it sold equipment at inflated prices and leased the equipment back from various lenders,'' the administrator's lawsuits say.

"The debtor misrepresented the value of the equipment and pledged certain equipment multiple times to secure the financing,'' the suits say, adding EAR was, "in effect, not a real, functioning company.''

EAR from October 2005 to October 2009 sent 21 checks to Wynn totaling $1.785 million so "Player, Malone, Anstett or others personally could engage in gambling and gaming activities at one or more of the Wynn casinos,'' the suit against Wynn charges.

"The debtor did not receive any value for making the payments,'' the lawsuit charges.

It further alleges some of the payments were "fraudulent transfers'' as "the debtor received less than reasonably equivalent value for the transfers.''

When the checks were cut "the debtor either was insolvent'' or had unreasonably small capital or was incurring debt it would be unable to pay, the suits say.

The suit against Wynn sought return, for the benefit of EAR creditors, of the $1.785 million. The trustee also sought $236,500 from the Luxor, $471,000 from the Rio and $30,000 from Harrah's.

Court records show the administrator has also been looking into at least $4.3 million in payments to the Horseshoe Casino in Hammond, Ind., $584,000 in payments to the Ameristar Casino in East Chicago, Ind., and at least $30,000 to the Palms hotel-casino in Las Vegas. Complaints, however, have not been filed against those properties.

Among the casinos sued, Wynn so far is the first and only defendant to answer the complaint and last week it disputed the assertions the $1.785 million should be paid back.

An attorney for Wynn argued in a court filing that the money paid to Wynn was not the property of EAR but rather was compensation to its executives Player, Malone and Anstett.

As EAR officers, board members or employees, "they were entitled to receive compensation and/or other remuneration from the debtor,'' Wynn's filing said.

"The transfers were compensation for services rendered by Malone, Anstett and/or Player,'' the filing said. "Malone, Anstett and/or Player directed that their compensation by paid directly to defendant (Wynn), instead of to them.''

Wynn's filing also argued Wynn "provided value'' to the EAR executives by "among other things, applying the transfers in satisfaction of Malone's, Anstett's and/or Player's debts to defendant (Wynn).''

The EAR bankruptcy has attracted attention in Midwest banking circles and the nation's equipment financing industry, with the liquidating officer saying the company ran a Ponzi scheme.

As part of the bankruptcy, the bankrupt company sued Player, Malone, Anstett and several limited liability companies saying EAR reported net income of $17.3 million in 2007 and $34.9 million in 2008, but charging: "Beginning in at least 2005, the individual defendants, for the purpose of enriching themselves, the Player children and the LLC defendants at the debtor's expense, misappropriated debtor's assets to purchase real and personal property and funded the LLC defendants.''

Reports in Crain's Chicago Business and Bankruptcy Court Decisions News & Comment indicate many lenders to EAR apparently were unaware its president, Player — now of Jackson Hole, Wyo., and Chicago — had served 31 months in prison for a massive loan fraud in the 1980s involving equipment sales and leasing and victimizing Greyhound Leasing & Financial Corp. of Phoenix (which later became part of FINOVA Group).

Player, then a businessman in Vernal, Utah, and Mesa, Ariz., had used phony collateral to borrow $66 million from Greyhound on the pretense it was intended for machinery leases and sales in which Player was the middleman. He instead plowed some of the money into Arizona real estate ventures and Greyhound sustained tens of millions of dollars of losses.

A 1985 Wall Street Journal story on Player quoted a Greyhound attorney as calling Player's scheme "one of the most complicated, sophisticated and convoluted frauds I've ever seen.''

The story noted that at the time, Player was an avid gambler who frequently flew in his private plane with employees and business associates to play baccarat at Caesars Palace.

With criminal investigators looking into the collapse of EAR, Player has declined comment on that case, Crain's Chicago Business reported.

EAR creditors owed some $175 million will likely recover just a few million dollars, court records show.

Illinois: Barreling toward disaster

The folly of Illinois' lame duck legislators believing that the tornado of fiscal disaster barreling toward them can be magically solved by sucking more discretionary income from the local economy by expanding gambling is simply breathtaking.

The bill was packed with enough goodies to salve the protests of existing licensees, such as Neil Bluhm, who re-bid on what he believed was the last available license.

...if the General Assembly passes a major
gambling expansion bill as early
as this week, 11 more facilities
could open right behind his.
In fact, his casino could be
ringed by five new competitors within
30 miles.

To avoid any of that pesky local control, not to worry!
It was carefully removed!

The bill also grants casinos and racetracks
an exemption to home rule. That
means that Churchill Downs Inc.,
Arlington Park's owner, would not have to
go to the Arlington Heights Village Board
for approval to add slots at the track.

"Home rule should not be usurped," said
Arlington Heights Mayor Arlene Mulder.

Gambling Addiction

Beacon Hill's Arrogance & Business as Usual

In the latest saga of Beacon Hill's arrogance, the Boston Globe offered:

O’Brien resigns amid scandal
Probation chief says he has been made a scapegoat

Rather than being scapegoated, the comments below lead one to believe that O'Brien was inadequately qualified for his position beyond being a successful lackey, providing jobs for the well-connected to curry favor --

If O’Brien’s demise lay in fixing jobs for political insiders, it was a skill he learned early. In fact, that practice may have begun on the day in 1998 when he became the state’s seventh commissioner of probation.

In 1984, when his predecessor was appointed, the top job at probation required a master’s degree or doctorate. O’Brien has a sociology degree from Boston College.

Ware found evidence that the late John J. Irwin Jr., the chief justice for administration and management in 1998, “made the qualifications for commissioner less rigorous so that O’Brien would qualify.’’

Irwin was an early and important influence on O’Brien’s rise to power at the Probation Department. He tapped O’Brien to be his key aide as legislative liaison for the Administrative Office of the Trial Court.

They both attended Boston College, and Irwin’s interest in O’Brien’s career would prove to be seminal. When Irwin showed up on Beacon Hill, lobbying on behalf of the Trial Court and its budget, O’Brien was his shadow.

That led to lasting and fruitful relationships in the Legislature, such as those with former House speaker Thomas M. Finneran and Representative Thomas M. Petrolati. O’Brien parlayed those connections to boost his budget and deflect challenges from judges, union chiefs, and other public safety officials who chafed at his secretive and pugnacious style.

Republicans weigh in --

Bruce Tarr, who will become the Senate minority leader next week, called O’Brien’s resignation “a positive development.’’

“But I think it would be a mistake to think that we don’t have serious reforms yet to make,’’ Tarr said. “The conditions that allowed the improprieties to happen are still in place, despite the fact that a key player is leaving.’’

House minority leader Bradley H. Jones Jr., Republican of North Reading, called the departure of O’Brien “long overdue, however an appropriate way to usher in the New Year.’’

“It is my hope that this will be the first step in the long, difficult process of cleaning up what is known to be a very corrupt Probation Department,’’ Jones said.

The actions of Republicans will define their sincerity.

Previously offered: Wait until you see the patronage Gambling brings!

The media, including the Boston Globe, remained silent as closed door meetings were conducted with the Gambling Industry to compose flawed legislation that was presented shortly before floor debates.

Posted here: Mushroom Farming Flourishes on Beacon Hill
(Mushroom Farming is what it is: Grown in the dark and fed a diet of manure. And it's flourishing on Beacon Hill.)

Kathi-Anne Reinstein, a Revere Democrat who
organized the SECRET CLOSED DOOR briefing,
told the News Service the session was closed
TO THE PUBLIC so state reps would
"feel comfortable to ask any questions without
having any type of criticism'' and surely at the
request of gambling interests who can make
undisputed wild promises that are unsubstantiated
and never be held accountable.

So why did DeLeo close the caucus to
the public and the press? What is he trying
to hide?
The most likely answer is that keeping
serious discussions secret is the default
setting on Beacon Hill. When in doubt,
lock everyone out.
The practice of having its most important
debates behind closed doors, and the
arrogance that practice reflects, has
everything to do with the Legislature’s
lack of credibility with the public. It may
be unfair, even inaccurate, to assume
corruption thrives behind locked doors
in the Statehouse, but DeLeo and his
colleagues only feed that notion with their
actions.

The media, including the Boston Globe, remained silent when 'public hearings' were conducted that failed to include gambling opponents, or at best, limited their time, or placed opponents last on the agenda, after the media cycle, effectively silencing them.

The problem goes far deeper than the Probation Dept. and needs to be probed.

The problem defines an attitude of leadership on Beacon Hill that believes it is immune from transparency and blessed with Divine Insight.

It's easy to ignore things like:

"There's evidence out that shows the cost for every dollar these casinos bring in costs the taxpayers about 2.1 dollars in social costs. It's a dangerous thing."

when your mind is already made up, with the assistance of gambling lobbyists.

By shutting me out of those sham meetings, you have convinced me you're hiding something. It's time to ask "what?"

Beacon Hill's "Casino Capitalism"

In the first Boston Globe of the New Year, Renée Loth offered 11 things we can live without in ’11 with her #1 choice --

More casino capitalism. This month we heard about a group of hedge fund investors trading in a hot new commodity: claim settlements for victims of Bernard Madoff’s massive fraud. These Wall Street sharpies are offering pennies on the dollar for claimants who want a guaranteed payout. What’s next — pooling the payments and then dicing them into derivatives? Did we learn nothing from the financial collapse?

More importantly, did we learn that 'something for nothing schemes' don't work?

How different is Madoff's fraud from the "Casino Capitalism" folly of Destination Resort Slot Barns presented and supported on Beacon Hill without conducting an Independent Cost Benefit Analysis?

From Frederica Cade's blog, filled with cases being brought with her explanation offered here --

This case was brought in coordination with President BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which Mr. BHARARA serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President OBAMA established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.


How different are legally approved 'casinos' offered with false promises than Bernie Madoff?

Ruston: Lost Local Control

Across the country, local control is surrendered to gambling, regardless of the desires of residents for their communities. This is just one more example:

Voter approved casino card game ban going?
ruston: Council expected to repeal new ordinance after cafe owner files suit

Two months after a referendum to restrict gambling won majority support from voters, the Town of Ruston now appears to be folding its hand on a new law banning “house-banked” card games once played in the town’s only minicasino.

On Monday, the Town Council will consider repealing a new ordinance that took effect in the town of some 765 residents based on voter approval of a November ballot measure, according to a letter sent this week by the town’s attorney.

“The Town Council appears to be in the process of repealing (the gambling ordinance) in its entirety,” David Britton, legal counsel for Ruston, wrote in a letter to Fircrest lawyer Joan Mell, dated Dec. 28.

The letter, obtained by The News Tribune from Mell’s law firm, was sent in response to a lawsuit challenging the town’s new gambling restrictions. It was filed Dec. 13 by Mell’s client, Steve Fabre, owner of the Point Defiance Café and Casino on North Pearl Street.

According to Britton’s letter, a proposal to repeal the ordinance “should come on for first reading at the upcoming January 3 Council meeting.”

“I will contact you after the repeal goes through to see what your intentions are with regard to the lawsuit,” Britton added.

Britton, Ruston Mayor Bruce Hopkins and Councilman Jim Hedrick did not return telephone calls Thursday seeking comment.

While pleased the town appears to be backing down, Mell and Fabre said separately Thursday that the ordinance prohibiting house-banked social card games, such as Black Jack, never should have gotten this far.

“It’s great they’re reconsidering their position,” Mell said. “But of course, they made my client file a lawsuit before they decided to do that.”

Fabre’s lawsuit in part contends that Ruston holds no authority to place citizen referendums on the ballot or enact them.

State law “does not provide referendum power or authority to Towns,” he argued in a petition filed in Pierce County Superior Court. “Ruston is a Town that does not have referendum powers.”

While not offering an opinion specifically about the Ruston case, Katie Blinn, an attorney for the Secretary of State’s Office, agreed Thursday that certain Washington towns don’t have referendum authority.

Well before the town put the question before voters, Fabre said he warned Ruston’s mayor and various town officials about the matter.

“I sent a letter out to everybody in town before the election and explained to them this was another mistake they were making,” Fabre said.

In August, the five-member Ruston Town Council already had approved Ordinance 1316 “to prohibit house banked social card games within the Town of Ruston, subject to and contingent upon passage of a referendum to the voters of the town.”

The ordinance further stated that, if approved by voters, the law would take effect upon certification of the election results by the county auditor.

On Nov. 2, about 52 percent of voters approved the measure, with 184 ballots favoring it and 168 opposed.

Along with the claim Ruston has no referendum authority, the lawsuit contends the ordinance is legally flawed for several other reasons. Among them, it contends that state law allowing gambling only authorizes “cities and counties to absolutely prohibit any or all gambling activities.”

“The statute does not give any authority to Towns,” the suit contends.

Amy Hunter, a spokeswoman for the Washington State Gambling Commission, declined Thursday to comment specifically about Fabre’s lawsuit. But she said several other small Washington municipalities – including Algona, Rainier, Clyde Hill and Yacolt – have enacted laws similar to Ruston’s to restrict gambling.

“This is the first time I’ve heard of anyone using that argument,” said Hunter, a 16-year commission employee.

It was unclear whether those communities have the same classification as Ruston.

Fabre’s suit is the latest in a series of legal actions he has brought against Ruston for what he considers the town’s malicious and illegal efforts to kill his gaming business over several years.
In 2010, a Pierce County judge struck down a Ruston gambling tax that Fabre said increased his payments by 400 percent. The judge found the Town Council didn’t follow its own rules for voting. (The town has yet to repeal the tax increase, Mell and Fabre said Thursday.)

Fabre, who also owns Cassidy’s Pub on Portland Avenue in Pierce County, bought the Point Defiance Café and Casino in 2003. He operated house-banked card games there until August 2008. At one point, the business employed 85 people, he said.

Now with four employees, the casino is largely a restaurant with a player-supported poker room. Even if the gambling ban is repealed, Fabre said he can’t immediately afford to restart casino-style card games.

After filing a claim for more than $9 million, Fabre has a separate damages suit pending against the town.

“I’ve been doing nothing but fighting Ruston for the past several years – and I’ve won every battle,” Fabre said. “But it’s crippled me financially.”

Bankruptcy for planned Las Vegas Casino

Failed plans for Strip casino drag second company into bankruptcy
By Steve Green

Investors and creditors face millions of dollars in losses as Indian casino figure R. Shawn Ellis of Las Vegas put another company into Chapter 7 bankruptcy liquidation Thursday.

Ellis Gaming & Entertainment LLC, doing business as Ellis Gaming, filed for bankruptcy in Las Vegas listing $12.1 million in liabilities.

Ellis Partners LLC owns 85 percent of Ellis Gaming with Sturm Gaming LLC holding the other 15 percent, the filing says.

Another Ellis company, Ellis Las Vegas Inc., filed for Chapter 7 in November, listing liabilities of $1.84 million.

The bankruptcies are related to failed plans for a gambling resort on the Las Vegas Strip and litigation between Ellis and the Elk Valley Rancheria, an Indian tribe with a casino in Crescent City, Calif., near the Oregon border on the Pacific coast, that Ellis used to manage.

Elk Valley Rancheria sued Ellis in 2008, saying it had loaned him $480,000 for development of the "Ellis Las Vegas" casino resort but that Ellis failed to pay back the money. Ellis maintains he doesn't need to pay back the money because the tribe converted the loan into equity in an Ellis company.

That lawsuit is set for trial in federal court in Las Vegas in March, though it could be settled before then.

In Thursday's bankruptcy filing, Ellis Gaming said its main asset is a $5 million "possible breach of contract claim" against Elk Valley Rancheria.

Other than that, the company's only asset is $25,440 in accounts receivable.

Creditors listed in Thursday's filing include:

--Seminole Wind LLC of Las Vegas, $5 million.

--Sturm Gaming of Las Vegas/Roland V. Sturm, $3.31 million

--Michael A. Coronado of Las Vegas, $1.17 million

--James D. Hammer of Las Vegas, $1.17 million

--Vision Building Systems of Las Vegas, $350,000

--Architectural firm HOK of Kansas City, Mo., $269,000

--First Security Bank of Nevada, $224,000

--O'Reilly Law Group of Las Vegas, $200,000

--MKP Trust/Matt Pearson of Las Vegas, $95,000

The filing says Ellis Gaming posted losses of $5.5 million in 2008, $42,900 in 2009 and $7.47 million this year.

The company had been leasing a 2007 Cadillac Escalade, but the vehicle was turned in on Nov. 12 when the lease expired, the filing says.

In 2009, the company sold office furniture for $365,000 to a company called Luxe Partners LLC, the filing says.