What happens in Vegas, Stays in Vegas?

Mandalay Bay agrees to $500K fine in drug sting

Thursday, March 13, 2014

 

 

LAS VEGAS — The Mandalay Bay Resort plans to pay a half-million-dollar fine after employees at an upscale Las Vegas Strip lounge provided prostitutes and drugs to undercover officers.

 

The Nevada Gaming Control Board filed a proposed settlement with the casino this week. It's awaiting approval by the Nevada Gaming Commission.

 

Authorities say undercover officers bought cocaine, ecstasy and other drugs from employees of the House of Blues Foundation Room over the summer of 2012. Officials say employees also connected officers with four prostitutes and a private room for sex. The sting caught 10 employees and five non-employees engaging in this kind of illegal activity.

 

Two have been arrested, according to Gaming Control Board Enforcement Chief Karl Bennison, and more arrests may be in the works. The arrests were delayed to avoid disruption to the operation.

 

"You're trying to see how far up the management chain things are being directed," Bennison said.

 

Officials with Mandalay Bay parent company MGM Resorts do not contest the findings of the complaint. The company said the employees involved in the activities have been fired, and the lounge has increased its training procedures to prevent future misconduct.

 

"While these activities took place outside our knowledge, we acknowledge our responsibility, as landlords, to monitor all nightclub and ultra-lounge operators at our resorts. The intolerable activities discovered by investigators are obviously completely contrary to the type of luxury resort our company strives to run," the company said in a statement. "House of Blues has increased its compliance and training procedures and reemphasized its zero tolerance for inappropriate conduct."

 

Mandalay Bay will also pay $17,000 to reimburse investigative expenses.

 

The Foundation Room is a chic restaurant and club on the 43rd floor of Mandalay Bay, which is on the Las Vegas Strip.

 

The complaint says that the investigation was initiated after an undercover officer bought cocaine from a person later determined to be a Foundation Room host. The officer asked the host if he could use the drug at the club and was told he could, if he was careful.

 

Most of the transactions that occurred during the sting took place in public areas in the casino.

 

State gambling regulators partnered with local police to conduct a similar sting in 2012 at the Palms

Casino Resort west of the Las Vegas Strip. In that case, nightclub employees accepted payments to supply prostitutes, cocaine and pain pills

 

Last spring, gambling regulators sent a letter to all casinos warning them to curb illegal activity at clubs and pool parties.

 

"It's a constant issue and concern, Bennison said.

 

 

http://bostonherald.com/news_opinion/national/2014/03/mandalay_bay_agrees_to_500k_fine_in_drug_sting

 

 

Vegas casino: Employee took high-roller info

Vegas casino: Employee took high-roller info

Posted: Jul 20, 2012

 

By KEN RITTER
Associated Press

LAS VEGAS (AP) - A Las Vegas casino resort obtained a court order Friday banning a former employee from distributing confidential files about thousands of high-rolling gamblers and guests that she is accused of misappropriating by emailing from work to her home.

The fired Palms Casino Resort host, Jessica Hemingway, told a judge she hadn't distributed the information that she sent to her personal computer so she could do her work at home.

"I was using it for the Palms, to market people to come to the Palms," Hemingway said in a court hallway minutes before Clark County District Court Judge Elizabeth Gonzalez issued a permanent injunction ordering Hemingway and her fiance not to distribute the information.

A lawsuit filed Tuesday by the resort against Hemingway alleges she misappropriated trade secrets.

Hemingway accused casino officials of firing her on July 9, two days after she filed a complaint with the Nevada Equal Rights Commission alleging that she had been sexually harassed by a male supervisor.

Hemingway and fiance Scott Yelton appeared before the judge without a lawyer. They did not contest an order to give casino officials access to her computer, but they rejected a proposed agreement with Palms attorneys that would include dropping the sexual harassment claim.

Citing first reports about the case in the Las Vegas Sun on Thursday, Yelton, 32, a retired Oklahoma City fire paramedic, said he and Hemingway, 31, wanted to clear her name.

The casino believes more than 50,000 files relating to thousands of people were involved in the emails but Social Security numbers were not included, Palms attorney Elizabeth Nelson said.

Nelson said she couldn't comment on pending litigation, including the sexual harassment claim and details of the lawsuit filed Tuesday against Hemingway in Clark County District Court.

The forwarded files included "valuable non-public, confidential and trade secrets information" belonging to the Palms Casino Resort, the court filing said.

"Palms tracks and records activities of its regular players, including what they play, when and how frequently they do so, their spending patterns and their credit lines," company attorney Elayna Youchah said in the document.

Hemingway began working as a casino host in the table games department in September 2011, signing a confidentiality agreement, the lawsuit said. Her primary responsibility was ensuring the comfort and enjoyment of casino customers by making sure appropriate complimentary services were received and reasonable requests fulfilled.

After learning in June that Hemingway was looking for another job, company officials checked her work emails and found confidential information had been compromised, the lawsuit said.

The information included lists and player information for more than 500 of the resort's high-roller customers, and for 6,000 people who qualified for invitations to the casino's coveted Super Bowl party, according to the lawsuit. Hemingway also was accused of emailing herself a spreadsheet detailing the casino's 2011 marketing strategy for out-of-town guests.

Palms referred a report about Hemingway's conduct to the Nevada Gaming Control Board, where Mark Lipparelli said its status was not immediately known.

Officer Jose Hernandez, a Las Vegas police spokesman, said he did not find that a police report had been filed.

http://www.wistv.com/story/19075780/vegas-casino-employee-took-high-roller-info

Bankrupt Gambling Addict Told: You still owe us $65 million

Fry's Electronics to Omar Siddiqui: You still owe us $65 million
By Lisa Fernandez

Fry's Electronics filed a complaint Monday, hoping to convince a bankruptcy judge that its now disgraced former vice president of marketing shouldn't be let off the hook for owing the San Jose-based company more than $65 million.

That's the amount the Internal Revenue Service first accused Ausaf "Omar" Siddiqui of Palo Alto in 2008 of embezzling from Fry's as part of an elaborate kickback scheme.

Siddiqui filed for bankruptcy in July, listing $137 million in debt, much of it gambling debt to casinos.

Many debts can be wiped clean in a bankruptcy, but the law also allows some debts to remain, including those acquired in an "offensive" manner, such as stealing.

A 25-page complaint filed by Fry's attorney James Wood of Lafayette asks a San Jose federal bankruptcy judge not to discharge the amount Siddiqui owes the company, headquartered on Brokaw Road in San Jose. It accuses Siddiqui of "willfully and knowingly" breaching his duties as a company executive.

This week, the Palms casino resort in Las Vegas filed a similar complaint, totaling about $2.5 million, based on a bad check Siddiqui wrote the casino in 2008.

Siddiqui pleaded guilty in February to two felonies: one count of wire fraud and one count of money laundering. He is scheduled to be sentenced in U.S. District Court on Dec. 8. As part of the agreement, Siddiqui admitted to defrauding the company of $65.6 million.

At the time Siddiqui filed for bankruptcy, he listed $80 in his checking account.

Siddiqui has repeatedly refused requests for interviews from this newspaper.

Fry's spokesman Manuel Valerio emailed: "As with all matters of litigation, Fry's respectfully will offer no comment."

Walnut Creek attorney David Katzen, who is an expert on bankruptcy law and not associated with this case, explained why Fry's and the Palms would bother wringing blood from a stone.

"Well, what if he buys a lottery ticket and wins?" Katzen asked rhetorically, adding that this 45-year-old defendant still has many more potential earning years ahead of him.

Also, filing a complaint like this sends a message.

"This is a precedent setting event," Katzen said. "This guy ripped them off, and even if collection isn't going to be possible, it does hold him accountable and sends a signal to the rest of their team that this is not a good idea, we don't turn the other cheek."

Reshuffles of Bankrupt Vegas Casinos

Familiar faces stay despite overhauls
Howard Stutz INSIDE GAMING

The near financial collapse of several Las Vegas-based gaming companies didn't shake the system.

Gaming revenues in the Las Vegas locals market have spiraled downward some 15 percent since 2008, pushed by the recession, record unemployment, a declining housing market and the diminished construction industry.

The lost business compounded the already shaky corporate financial structures that several casino operators brought upon themselves through leveraged buyouts, development projects or other ill-timed decisions.

Creditors and banks, however, didn't want to run the casinos.

For the most part, debt was restructured and financing was acquired. Management, however, remained in place.

That's why it's not shocking that George Maloof will continue to operate the Palms.

Maloof's ownership in the 1,300-room off-Strip hotel-casino will drop from 85 percent to 2 percent once gaming regulators approve a restructuring of $400 million in debt. The casino's creditors, investment firms TPG Capital and Leonard Green & Partners, will each own 49 percent of the property.

Without Maloof's marketing skills and vision, the Palms is just another attractive Las Vegas casino. The private equity firms are banking on Maloof keeping the Palms on track while the economy recovers.

The same scenario holds true for Station Casinos. The company emerged from bankruptcy last month largely intact.

Creditors had ample opportunity through bankruptcy to dump the founding Fertitta family and break up the 18-casino company. Boyd Gaming Corp. stood ready to acquire all or part of Station Casinos during the restructuring proceedings. Regional gaming operator Isle of Capri Casinos was prepared to manage several of the company's resorts on behalf of the lenders.

In the end, the banks and unsecured bondholders decided to stick with brothers Frank Fertitta III and Lorenzo Fertitta and their existing management.

The Fertittas put $200 million into the deal and own 45 percent of the new company, their largest stake ever. When Station Casinos was publicly traded, the Fertittas held 9.9 percent. Following a $5.4 billion deal to go private in November 2007, the Fertittas had 25 percent.

But the brothers are not in control. It's presumed Deustche Bank AG (25 percent), JP Morgan Chase & Co. (15 percent) and the former bondholders (15 percent) would vote as a bloc on any matter.

The lenders forgave $4 billion of the company's previous $6 billion in debt through restructuring. So it's likely they have the Fertittas on a leash. How long or short is anyone's guess.

The lenders are wagering that the Fertittas and their management team will do what they have done best -- operate the casinos. Before the economy fell apart, the Fertittas were known as decent managers.

That's what the debtholders want to see again, which is why Southern Nevadans have been inundated with the company's "We Love Locals" advertising campaign and a hefty promotional environment. Station Casinos is trying to win back the love of the consumer.

Same with M Resort.

Anthony Marnell III and his family spent close to $1 billion to build M Resort, opening the stylish property during the heart of the recession. The first few months -- helped by a heavy promotional effort -- provided a false sense of security.

Penn National Gaming bought M Resort's $860 million in debt for $230.5 million, a nearly 75 percent discount, less than two years after the resort opened.

At first, it seemed Marnell was out of the picture. Penn executives, however, liked the way he ran the property and gave him a reported five-year deal to serve as the casino's president. Marnell told Nevada gaming regulators he was negotiating with the company for an equity position in M Resort.

Herbst Gaming is the only troubled company that didn't follow the model.

The Herbst brothers, facing $1.15 billion in debt, proposed keeping 90 percent of their slot machine route business while giving creditors 100 percent of the company's casinos. The noteholders objected and the bankruptcy court approved a reorganization that gave senior lenders control of the entire company. The brothers were removed and Herbst Gaming is now Affinity Gaming.

Recently, family patriarch Jerry Herbst formed a slot machine route business -- JETT Gaming -- with the idea of reclaiming the slot machine operations at his company's Terrible Herbst convenience stores.

The more things change, the more they stay the same.

Patrons Unsafe in Casino Valet Parking Area

The Gambling Industry attempts to silence all reporting of assaults that occur on their premises, yet the article below raises the issue of the negligence of Parks to intervene to protect a patron.



Las Vegas boxer Floyd Mayweather sued for assault

Las Vegas, NV (KTNV)- Another lawsuit has been filed against Las Vegas boxer Floyd Mayweather Junior. This time the accusations are related to an assault that allegedly occurred outside the Palms Hotel-Casino last year.

Anthony Cliff, who lives in Clark County, filed a suit Friday in a state court in Las Vegas against Mayweather, his company Mayweather Promotions LLC and others.

According to Cliff's attorneys, Gazda & Tadayon, the incident happened on March 27, 2010, in the valet parking area of the Palms.

Cliff claims that he tried to take the boxer's photo and made some comments about a potential fight for Mayweather, when Mayweather replied that Cliff was disrespecting him and gave the thumbs-down sign to his bodyguards.

That was a "signal for the bodyguards to attack Cliff, which they then did, striking Cliff in the face, knocking, pulling or pushing Cliff to the ground,"' the suit charges.

The suit then claims that Cliff's head struck the pavement and the bodyguards repeatedly kicked him in the back and side.

Mayweather and his company are being sued for assault and battery, intentional infliction of emotional distress and negligent hiring, training, supervision and retention of employees.

The Palms is also being sued for negligence, for failing to have adequate security in the valet parking area and failing to keep Mayweather and his entourage in check.

Mayweather is no stranger to run-ins with the law. Back in 2005, he was convicted in the beating of two women at a Luxor club. He was given a suspended one year jail sentence for that crime. Since then he has also been sued for various other crimes including domestic violence, harassment, grand larceny, and most recently, defamation.

We contacted Mayweather's attorneys but they have not yet responded.