LaSaracina gambled tens of millions over decade

Report: LaSaracina gambled tens of millions over decade
By Brian Hallenbeck
Publication: The Day

F. Robert LaSaracina, the former Norwich accountant awaiting sentencing in a multimillion dollar fraud scheme, racked up more than $70 million in gambling winnings - and almost as much in losses - from 2000 to 2009, pages from his federal tax returns show.

LaSaracina, who has blamed his misdeeds on an "all-consuming" gambling addiction, reported that he won and lost slightly more than $4 million in 2000, earning no profit. Over the next three years, his returns indicate he won successively greater amounts each year, peaking at $12.7 million in 2003. During that span, he reported gross profits of nearly $4,000 in 2001, $28,000 in 2002 and nearly $25,000 in 2003.

After that, his winnings began to taper off, reaching a low of $2 million in 2009, when he reported a profit of a little more than $3,000. All told, he reported a $99,255 profit on $70,322,222 in winnings over the course of the decade.

By any standard, the amounts confirm LaSaracina's status as a heavy gambler, one who sources have said was a fixture at gaming tables and slot machines at Foxwoods Resort Casino and Mohegan Sun.

"His lowest year (2009) was bigger than anything I've ever seen," Colin Cody, a Trumbull-based certified public accountant who maintains the website ProfessionalGamblerStatus.com, said Friday after reviewing LaSaracina's "Schedule Cs."

The documents were made public this week when federal prosecutors filed them in connection with LaSaracina's upcoming sentencing, which is scheduled Tuesday in U.S. District Court in Hartford. Assistant U.S. Attorney Michael McGarry, the prosecutor in the case, questions LaSaracina's claim that gambling losses motivated his criminal behavior even though his tax returns indicate net winnings.

LaSaracina, 60, pleaded guilty in July to wire fraud and failure to pay federal taxes withheld from employees of the accounting firm he used to own. The government recommended he be imprisoned for 63 to 78 months and ordered to pay fines and make restitution to those he defrauded.

In presentencing memorandums, LaSaracina's attorneys, Hubert and Jessica Santos, have argued for leniency, citing their client's gambling addiction, among other things, as a mitigating factor. They contend LaSaracina's gambling compulsion was so severe it caused him to have a "significantly reduced mental capacity."

Cody, the CPA who reviewed LaSaracina's Schedule Cs, said LaSaracina appeared to have filled out the tax documents as if he were a professional gambler, a designation that can have significant tax implications.

"He's not representing himself as a casual gambler by any means," Cody said. "He's showing a statistical analysis (on his Schedule Cs), reporting income from gambling form W-2G."

Gamblers have to meet certain qualifications to qualify as professional gamblers for tax purposes, according to Cody, who advises both casual and professional gamblers. He said few gamblers qualify.

Gambling losses can be taken as deductions on federal tax returns. In Connecticut, the state taxes gross winnings in the case of the casual gambler; it taxes net winnings, or profit, in the case of the professional gambler.

The link between LaSaracina's legal troubles and gambling first became public following his Oct. 20, 2010, arrest on federal charges. Among the conditions of his bond release were orders that he avoid casinos and undergo evaluation for a gambling addiction.

LaSaracina has admitted to defrauding more than a score of victims, including the beneficiaries of a Norwich family trust, of more than $2.5 million, a figure the government believes to be much higher.

Some other presentencing filings have been sealed.