Monthly Archives: October 2016

Florida State & Seminole Tribe in Court over Exclusive Gambling Deal and Gambling Compact

Casino Watch Focus has reported on the ongoing nature of the gambling compact between Florida and the Seminole Tribe. They operated under an ongoing exclusive agreement that provided Seminole gambling facilities exclusive rights to table games in exchange for a specified revenue stream to the state of Florida. That deal came to an end and a new compact had to be renegotiated. A new deal was worked between the Seminoles and Florida Gov. Scott, but it was full of extra gambling expansion and provisions that the Florida legislature rejected. The Seminoles and Florida government had been operating in good faith to uphold the exclusivity agreement while payments were being made to the state after the fact, but then they authorized games by other gambling facilities. Now a new trial has taken place that will seemingly be ruled in favor of the Seminoles. The Sun Sentinel online explains:

A three-day trial that could shape the future of gambling in the state ended Wednesday. Attorneys for the tribe maintained during the trial that regulators who work for the Scott administration allowed dog and horse tracks to offer card games and an electronic blackjack game that mimicked the tribe’s casino games. They said that under the initial deal, the tribe would be allowed to keep blackjack for another 15 years if the state allowed someone else to have the same type of gambling.

But attorneys hired by the state disagreed with that assertion and suggested that the tribe was trying to find a way to keep blackjack tables that it is no longer entitled to keep. Top regulators for the state testified that they began to crack down on illegal card operations once they became aware of it.

The judge has not yet ruled on the case but his statements during the trial seemed to very cleanly indicated he was siding with the Seminoles. The impact of this ruling will have very clear impacts on the expansion of gambling in Florida and who will be allowed or not allowed to offer such games. The Sunshine State News explains: 

A federal judge appeared convinced Wednesday that Florida gambling regulators’ decision to allow controversial card games violated an agreement with the Seminole Tribe that gave tribal casinos exclusive rights to conduct “banked” games such as blackjack. “The state has permitted banked card games to go on (at pari-mutuel facilities). … It’s a stretch for you to convince me that the state did not permit that,” Hinkle, who is expected to rule in the coming weeks, told Moe.

Hinkle pointed to testimony from the Seminoles’ expert witness, Jimmie Ray Kilby, who defined a banking or banked card game as one in which all players play against the bank, instead of against each other. “Everybody in the industry knows that’s a banked game,” Hinkle said. 

[Additionally, he said,] “The state of Florida says if the secretary of DBPR (the Department of Business and Professional Regulation) says we’re going to allow banking games in flat-out competition with the tribe, this provision would not be extended beyond five years (because the Legislature didn’t authorize it)?” an exasperated Hinkle asked. “You’re not going to win that argument. You’re just not.” Department Secretary Ken Lawson, who was present for Wednesday’s closing arguments, would not respond to questions from reporters.

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A Brief Look at Crime 10/17-10/23

Court: Greeneville bank manager embezzled more than $1 million to gamble on Fantasy Football

Federal court documents reveal a former Greeneville, Tenn., bank manager embezzled more than $1 million from over a dozen customers and squandered the money in online fantasy football leagues and on personal debts. The data showed Miller waived indictment and arraignment and pleaded guilty. The documents show Miller began working at First Tennessee Bank in May 2000 and was most recently employed as Financial Center Manager at the center located on North Main Street. U.S. Attorneys contend that Miller began his scheme in April 2012 and embezzled thousands of dollars from certificates of deposits and IRA funds from customers, including a church, individual accounts and loan holders. In all, the prosecutors said 15 customers were bilked. The attorneys wrote that Miller would earn and abuse the trust of clients by telling them he would engage in transactions they would benefit from. He targeted customers that he knew would not review monthly statements or detect the embezzlement, they said. They also said he lost or spent a majority of the money he stole by gambling online using such fantasy football sites as DraftKings and FanDuel.

Man guilty in murder of elderly Sterling Heights man

 

A 47-year-old Detroit man is expected to face life in prison after being convicted of delivering a blow that killed a Sterling Heights robbery victim last year. Bogucki’s son, Paul Mitchell, who attended the trial, said he and his mother, Rose Marie Bogucki, were satisfied with the outcome. “We’re relieved the jury saw things the same way we did,” Mitchell said. “We’re happy with the job the prosecution did in presenting a strong case and we’re happy with the police and the FBI.” The murder culminated a series of attacks on elderly people during prior weeks in the Warren-Center Line-Sterling Heights area that spurred the formation of a task force composed of local police along with the FBI Violent Crimes unit. Davidson was suspected of committing at least two others. He fled on foot and used Mrs. Bogucki’s credit card at 7:23 p.m. at a Shell gas station at Schoenherr and 11 Mile Road in Warren and used or tried to use it at three additional gas stations and a Detroit casino, according to Bukowski. Mr. Bogucki, whose head struck the pavement, died eight days later.

Robbery suspect shot by police pointed spray nozzle at officers 

 

A robbery suspect fatally shot by police on the 215 Beltway last week pointed a taped spray nozzle resembling a handgun at officers before they opened fire, according to Metro Police. Before he died, the suspect, Rex Vance Wilson, texted his wife goodbye and wrote “sorry” in his own blood on his SUV’s dashboard, police said. Wilson, a former Marine, used the spray nozzle to commit a string of 16 robberies over a 10-day span, police said. It certainly appears he intended to be shot by police,” McMahill said. Wilson, 50, performed four years of active duty in the U.S. Marine Corps and two years in the Marine Reserve, McMahill said. Wilson’s wife told police he suffered from depression and compulsive gambling disorder and that he also used cocaine, McMahill said. Wilson had made phone calls to the family’s life insurance company and a suicide hotline, he said.

Jazzercise ex-finance chief accused of $1M theft

The former finance director of Jazzercise is behind bars, accused of embezzling upwards of $1 million from the Carlsbad-based company and its owners, possibly to feed a gambling habit. Sherri O. Potts — who spent about a decade as the corporate director of inance for the physical-fitness firm — pleaded not guilty earlier this month to 50 theft-related charges, including forgery, fraudulent appropriation and grand theft by an employee. Authorities suspect that much of the money was siphoned from petty cash funds, perhaps $10,000 a month for a few years, according to court documents. The 60-year-old Fallbrook resident faces a state prison sentence of nearly four decades if convicted of all charges. Her defense attorney, Joel Bailey, declined comment Monday.

Little Egg Harbor Couple Arrested on Sandy Fraud Charges 

Two Little Egg Harbor residents were arrested Tuesday for allegedly stealing hundreds of thousands of dollars from 26 victims who hired the couple’s home improvement companies to repair or rebuild their homes after Superstorm Sandy. Detectives of the Division of Criminal Justice arrested Jeffrey Colmyer, 41, and Tiffany Cimino, 43, on Tuesday, Oct. 11.The victims paid Colmyer, Cimino and their firms over $1 million, mostly in Sandy relief funds, but the couple allegedly diverted much of the money to gamble and buy luxury items, leaving homes in disrepair. 

5 men charged in New York with running illegal online gambling are back in California 

Five Santa Clarita Valley men arrested, then extradited, to New York a year ago following the crackdown of an alleged illegal $32 million nationwide sports betting ring are back in California and believed to be living in the Santa Clarita Valley. The five men arrested in an early morning raid Oct. 28, 2015, were among 17 suspects across the country indicted that day by a Queens County grand jury on charges of unlawfully operating a highly sophisticated sports gambling enterprise that stretched from New York to California and used offshore-based gambling websites. In March, each of the five suspects from Santa Clarita Valley pleaded not guilty in New York to the criminal charges against them, a spokesman for the Queens County District Attorney’s Office told The Signal. Only one of the accused men, 38-year-old Cyrus Irani, described by prosecutors as the kingpin in the online gambling operation was given conditions upon his release from custody.

Alleged embezzler has brief court appearance 

The woman who authorities say committed the largest known embezzlement in city history had a brief appearance in Mohave County Superior Court on Tuesday. Diane Maxine Richards, a former longtime city employee, is accused of stealing more than $1.1 million dollars from the city. The case carries two aggravating circumstances. The first is the amount allegedly taken, and the second was Richards’ position as a public servant. She was the interim finance director and budget analyst. Richards is alleged to have transferred money out of the account to pay off 17 personal lines of credit and used a large portion of the money to cover cash advances taken out at casinos in Laughlin.

For more information on the dangers of gambling, please visit CASINO WATCH & CASINO WATCH FOUNDATION


Florida Judge Slaps Horse Racing Group with Show Cause Order

Casino Watch Focus has reported on the continuing struggle of Florida’s Greyhound horse racing industry.  Horse racing has been on its last leg for some time, seemingly staying afloat not by the revenue generated by the races themselves, but due to the slot machine revenue those have collected at their facilities. The recent focus of a ballot initiative petition was the treatment of horses in the industry and others are convinced the industry would collapse if not for the additionally allowed gambling at the races. Now industry in fighting can be added to the worries facing the industry as a Florida Judge has issues a show cause order.   The Saint Peters Blog explains:

A Marion County circuit judge is giving a statewide racehorse owners group 20 days to explain why it shouldn’t be ordered to consider changing the way it operates. The “order to show cause” was entered against The Florida Thoroughbred Breeders’ and Owners’ Association on Friday. It is based in Ocala, informally known as “Horse Capital of the World.”

Horse trainer *Adolfo Exposito* sued the association after it refused to put eight changes to its bylaws up for a vote at its membership meeting, set for this Thursday. The proposed changes are backed by what the Ocala StarBanner has called a “dissident group” of nearly 60 members. They involve, among other things, making the association pay out more “incentive awards and payments” to its members instead of keeping the money, and capping total employee compensation at $500,000 per year.

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A Brief Look at Crime 10/10-10/16

Eldorado employee dies after attack at casino 

Reno Police say an Eldorado employee has died after being attacked inside the casino. Police say 63-year-old Frederick Douglas Borden was gambling when he committed a robbery September 30, 2016 just after 8PM. When Borden tried to leave the casino, he hit the 52-year-old employee and fled. The victim was transported to Renown, where he died the nexdt day. The cause of his death has not been determined and his name has not been released. Detectives found Borden Saturday and he is now in custody for the robbery. Police say the investigation is ongoing and more charges are possible pending results of an autopsy.

Attempted murder allegedly caused by gambling debt

A 21 year old man from Bloomington is on trial charged with attempted murder. Deonte Jordan is also facing charges of armed robbery and aggravated battery with a firearm. At the McLean County Law and Justice center the alleged victim identified Jordan as the man who shot him in 2014 in the 900 block of west Washington street. The dispute was reportedly over a gambling debt. Jordan was also picked as the suspect following a police lineup.

Sports book firm to pay $22M in penalties in gambling probe

Authorities in New York say one of the nation’s largest race and sports book operators has agreed to pay $22.5 million in penalties and forfeiture to resolve criminal and civil investigations. Federal prosecutors in Brooklyn announced the non-prosecution agreement Monday for CG Technology LP, formerly known as Cantor Gambling. The Department of the Treasur ‘s Financial Crimes Enforcement Network announced separate civil penalties. Prosecutors say the deal resolves a probe into the company’s past involvement in illegal gambling and money laundering schemes. Brooklyn U.S. Attorney Robert Capers says the Las Vegas-based company agreed to cooperate and take remedial measures. Las Vegas U.S. Attorney Daniel Bogden says CG Technology admitted violating law by accepting messenger betting, accepting out-of-state betting and laundering money. A company spokeswoman has declined to comment.

Gaming Commission fines four Missouri casinos

The Missouri Gaming Commission met Wednesday to discuss disciplinary actions against four casinos from around the state among other business. Ameristar in St. Charles, Bally Technologies, Harrah’s in North Kansas City, and Tropicana of St. Louis, better known as Lumiere Place, all faced disciplinary actions for findings in audits from 2015. The most debated of the four actions was the one levied against Lumiere Place in which dozens of casino employees failed to properly identify a minor drinking and gambling on the casino floor using a fake ID. Other disciplinary actions included an approval of a $20,000 fine against the Ameristar Casino in St. Charles. An audit found the casino had five violations after a follow-up to a May 2015 compliance audit. Some of the violations included a lack of documented investigations into chaos variances, allowing the director of player development to have access to wagering and promotional accounts, and numerous instances where poker dealers failed to “clear their hands.” Clearing one’s hands is a practice where poker dealers hold their hands open before leaving a table to assure patrons and security cameras that they are leaving the table empty handed.

2 people kidnapped, robbed after leaving Detroit casino 

A man has been arrested after two elderly casino patrons were kidnapped from a parking structure in downtown Detroit and robbed. State police say Monday that the victims were leaving Greektown Casino early Sept. 23 when they were ordered into their vehicle and told to drive around. The man fled after taking their money at gunpoint. Surveillance video inside the casino recorded a man speaking with the two people on numerous occasions as they gambled. Video also captured images of a vehicle the man rode in to the casino. He was later identified as a parole absconder and arrested Thursday. He was turned over to the Michigan Department of Corrections. The case remains under investigation.

Scottsdale police: Couple go to casino, leave child in car 

A couple has been arrested for allegedly leaving the woman’s young son inside a car while they gambled at a Scottsdale casino. Scottsdale police say 23-year-old Brad Porter Jr. and 25-year-old Jessica Lopez were arrested around 3:30 a.m. Sunday outside Casino Arizona. Court documents state that Lopez’s 5-year-old son was left alone inside the couple’s vehicle and police found marijuana and three bottles of beer inside the car. Police say Porter and Lopez are facing child abuse, endangerment, drug possession and drug paraphernalia charges. It was unclear Monday if either Porter or Lopez has an attorney yet.

Catholic Charities embezzler sentenced in $142,000 theft  

A Washington man was sentenced to 15 months in prison Wednesday for stealing more than $142,000 from Catholic Charities of the Archdiocese of Washington, where he worked as an office manager. Floyd L. Middleton, 47, pleaded guilty in July to a federal charges related to a five-year scheme in which he submitted reimbursement claims for bogus expenses and false invoices to help pay his rent. Assistant Federal Public Defender Dani Jahn sought probation, saying Middleton was a gambling addict whose divorce and diagnosis with a life-threatening disease sent him into a cycle of “despair . . . increased gambling and additional poor decision-making, which spiraled out of control.”

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Florida Lottery Could Double Gambling Under Major Expansion

Casino Watch Focus has reported on the many ongoing efforts to expand gambling in Florida. Most efforts have focused on new mega casinos, expanding the amount of slot machines that operate in the state, or adding new card games to various gambling facilities, whether in electronic or actual card form. But one danger that can often be overlooked stems from the lottery. Florida has operated a large lottery for some time, but now the dangers to Florida families could potentially double under a new major expansion contact. The Times Union online explains:

The Florida Lottery – which just registered more than $6 billion in annual sales — is in line for a large expansion due to a massive new contract that state officials signed this month. Lottery officials, who report to Gov. Rick Scott, signed a 13-year contract worth more than $700 million with IGT Global Solutions covering major aspects of the lottery, including the systems used to sell tickets for games such as Powerball and Mega Millions. 

One big change in the contract is a plan to nearly triple the number of automated ticket machines capable of selling both scratch-off tickets and those for online games such as Powerball. This would increase the number of machines statewide from 2,000 to 5,500. The contract also calls for a new smartphone application that will let players check their tickets and allow them to enter second chance sweepstakes that the Lottery also offers.

The state of Florida is hopeful see huge revenue gains, but many see the downside to making losers of its people and additional issues with deals that expand gambling without involving the legislature or the looking to the will of the people. The Times New Union continue:

State Sen. Rob Bradley questioned the plans by lottery officials to expand their gambling operations. He noted that this past year legislators considered bills that would have limited some of the tickets they can sell.

“If there are portions of the agreement that result in expansion of the lottery, that’s a cause of concern,” said Bradley, a north Florida Republican who has been in charge of the Senate committee that regulates gambling.

“This is a government sponsored enterprise,” Bradley added. “We have an extra obligation to make sure we are not preying on individuals addicted to gaming. We have to make sure we are not focusing on populations who can’t afford to be spending their hard earned dollars on gaming.” 

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A Brief Look at Crime 10/03-10/09

2 arrested after fatal shooting at cafe

Police are investigating a fatal shooting at a cafe where at least a dozen illegal gambling machines were later seized. Authorities say an attempted robbery led to the Saturday morning shooting. A 44-year-old woman who was shot in the chest died at the hospital and a 25-year-old man is recovering from a gunshot to the shoulder. Two people have been arrested. Hawaii News Now reported that an undercover raid by Honolulu police officers led to the discovery of the gambling machines at the cafe. Police are investigating the establishment as a possible gaming room.

Former Frisch’s (FRS) exec may have embezzled much more than $3.9 million

A former Frisch’s Restaurants exec embezzled more than the $3.9 million he pleaded guilty to and spent much of it on gambling at casinos, buying property and cars and renovating his house after his mother moved in with him, according to the U.S. Attorney’s Office. The government called the $3.9M figure “a conservative estimate” of what Michael Hudson stole during his 10 years as assistant treasurer (2004-2014). Hudson admitted his theft started in 2004 but complete bank records are not available for 2004 to 2007, so there’s no telling how much he stole in those four years, the feds said in their sentencing memorandum. For sentencing purposes, the feds declared that the total embezzled was less than $9.5 million. Hudson, 53, of Cincinnati, was sentenced to five years in prison Thursday and ordered to pay a total of $4.6 million in restitution on one count of wire fraud and one count of filing a false federal income tax return. Hudson also was sentenced to three years of supervised release.

Dunmow man who stole £2.1m gets four years in jail

 

A director of finance who lived in Dunmow stole £2.1million over 15 years from his employer to fund a luxury lifestyle was jailed for 4 years. Michael Canning, 50, earning £65,000 a year, stole the money from specialist coffee equipment supplier Mulmar Foodservice Solutions in Hatfield, Herts. A colleague spotted discrepancies with invoices earlier this year and alerted the authorities. Canning, a married father of two sons, splashed the money on holidays, clothes, gambling, meals out, school fees, family expenses – and £84,000 on dating sites such as the hacked Ashley Madison and “cam girls”. Judge John Plumstead told Canning: “You have brought ruin on yourself. You must have known over those 15 years that it would all catch up with you.

Online casino affiliate accused of hacking major university websites

An online casino affiliate has been accused of hacking numerous higher education websites to boost its Google search results. Last week, web marketing agency *eTraffic* published a report indicating that an unidentified online casino affiliate site’s surge to the top of Google’s search engine rankings appeared to have been the result of some seriously ‘black hat’ optimization techniques. Between January and September 2016, the affiliate site in question had gone from Google keyword rankings in the 40s and 50s to top-10, including number one rankings for traditionally pricey keywords/phrases like ‘real money slots,’ ‘online slots real money,’ ‘real slots,’ ‘real online slots’ and ‘play real money slots online.’ eTraffic notes that one of the key factors Google employs when ranking search results is the number of backlinks from top level domains like .gov and .edu. The affiliate had 76 such backlinks from major educational sites in the US and other countries, including New York University, Dartmouth College, Duke University and Stanford University.

Fake WV Charity Scam Nets Millions for 7 Defendants 

Seven Martinsburg, WV residents, accused of operating a fraudulent charity, were charged with 53 counts of federal offenses from mail fraud and money laundering to aiding and abetting an illegal gambling business. All those charged were released by a federal magistrate and are under travel restrictions until they are arraigned on Wednesday. Between 2007 and 2014, the group reportedly received more than 90 percent of revenues after gambling winnings were paid to customers, totaling about $7 million. According to news reports, the organization was supposed to benefit the local humane society and the local chapter of the Fraternal Order of Police. The charities were surprised to find out that the bingo operation was generating far more than the $1,000 or so a month they believed was the case.

Former SeaWorld manager gets 30 months for fraud

A former manager at SeaWorld who embezzled $818,000 from the company was sentenced Sept. 23 to 30 months in federal prison for wire fraud and filing a false tax return. Wilfred David Jobin-Reyes, 48, who is known professionally as Sebastian Jobin, was ordered by U.S. District Court Judge Jeffrey Miller to repay SeaWorld the $818,000 he took from them. He worked for SeaWorld for 17 years. Miller also ordered Jobin to repay $177,000 to his former roommate, whose identity he used to get credit cards to spend at casinos and trips. Jobin has reached an agreement with the Internal Revenue Service to pay $207,000 as a penalty for not declaring his total income to the IRS.

SEC Punishes Casino-Gaming Company For Retaliating Against Whistleblower 

The Securities and Exchange Commission said Thursday it penalized a casino-gaming company for retaliating against a whistleblower. International Gaming Technology agreed, without admitting or denying the allegations, to pay $500,000 for firing an employee with several years of positive performance reviews because he reported to senior management and the SEC that the company’s financial statements might be distorted, the SEC said in a statement. The employee was removed from significant work assignments within weeks of raising his concerns, and he was terminated a few months later, the SEC said. Bob Vincent, a spokesman for the company, said the incident occurred before the company went through a merger, and the newly formed company agreed to a settlement. The case involving International Gaming Technology is the second whistleblower retaliation case brought by the SEC since it was authorized by the Dodd-Frank Act to bring such cases, the agency said. It’s the SEC’s first stand-alone retaliation case, said Jane Norberg, the newly permanent chief of the whistleblower office.

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DraftKings Sued for $4 million for Non-Payment of Advertising Deal

Casino Watch Focus has reported on the many woes of the Daily Fantasy Sports (DFS) industry. They have come under fire for being sports gambling and various legislation has been passed on a state by state basis. Some have banned it, others have regulated it. They were scrutinized for insider-trading type scandals and hacking vulnerability. They have been exposed for their role in being used by the NFL to market to kids and the risk they put on corporations that allow fantasy sports in the workplace. Now one of the two major daily fantasy sports companies, DraftKings, is being sued for over $4 million for not paying their bills and backing out of contractual agreements. Forbes Online explains:

DraftKings has been sued in the U.S. District Court for the Southern District of New York, with the plaintiffs seeking no less than $4.16 million in damages. The stated damages include $575,000 in alleged unpaid invoices as well as benefits that DraftKings is claimed to have received from an agreement that DraftKings entered into.

On April 4, 2016, after four invoices were past due, the plaintiffs allegedly contacted Robins via text and Robins responded ensuring that payments would be made. That same day, DraftKings Chief Financial Officer Janet Holian asked the plaintiffs to stop producing the DraftKings-related programming. A week later, Holian said that DraftKings would not be making any further payments.

The plaintiffs claim that they are entitled to additional damages based on DraftKings’ promise that it would execute a contract reflecting the totality of the deal terms as well as the expenses that the plaintiffs incurred (well over $1 million, per the Complaint) due to DraftKings’ promises. Additionally, the plaintiffs allege that DraftKings was enriched at the plaintiffs’ expense. 

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