A Louisiana lawyer, who has admitted bilking clients out of as much as $20 million, did business with at least three casino companies. But, up to now, these companies aren’t sure they were his victims.
Jamie Perdigao, who provided legal services for Pinnacle Entertainment Inc. (PNK), Harrah’s Entertainment Inc. (HET) and their recently acquired Horseshoe Gaming Holding Corp., was jailed in October but released a month later when he agreed to help authorities retrieve more than $2 million he wired to an overseas bank account.
Meanwhile, the gaming companies have hired experts to determine if and how much the fraud cost them.
Perdigao, as a partner in the law firm of Adams and Reese, said he used creative billing to overcharge clients. Sometimes, he even used a colleague’s password to download numerous documents that he was able to use in his fraudulent scheme.
The law firm said Perdigao collected fees "off the books" by manufacturing official looking bills. He then would deposit the payments in the firm’s trust account that was used to distribute money as settlements but not used for the law firm’s regular operation.
Posing a problem for the firm’s clients was the fact that some of the Perdigao billing was legitimate.
In the initial review, Pinnacle indicated that some of its billings were legitimate but others appeared to be "off the books." Pinnacle, formerly known as Hollywood Park Inc., hired the firm in 1999. The company operates casinos in New Orleans and in Bossier City.
Horseshoe Gaming, formerly owned by Jack Binion and associates, signed on with Adams and Reese a decade ago. A spokesman indicated that most of the records are now in the possession of its acquirer, Harrah’s.
The law firm said it stumbled on Perdigao’s billing scheme by accident when a Pinnacle employee called to ask whether a certain bill had been paid. The accounting department could find no record of the billing, thus triggering the investigation.
A politically connected Scranton, Pa., businessman is believed to have thrown his hat into the ring for a Pennsylvania slot machine license with the purchase of the defunct Mount Airy Lodge in the Pocono Mountains.
Louis A. DeNaples, who is said to have a warm business relationship with gaming commissioner William Conaboy, has agreed to pay $25.1 million for the resort that has been closed for the past three years.
State officials called the license suggestions "pure speculation" and that if DeNaples applies for a license he will face the same scrutiny as all others.
In 2001, the Philadelphia Daily News linked DeNaples to mob boss William "Big Billy" D’Elia, suggesting that he paid protection money for one of his companies.
Lakes Entertaiment Inc. (LACO), whose recent activities have been linked primarily with its partially owned subsidiary, World Poker Tour (WPTE), announced on Monday that it had signed a consulting agreement and a management contract with the Kickapoo Traditional Tribe of Texas.
Involved is the recently expanded Lucky Eagle Casino in Eagle Pass, Texas, located about 140 miles southwest of San Antonio. The property now has about 1,000 Class II slot machines and a few table games.
Lakes Entertainment said that if the contract is approved by the National Indian Gaming Commission, the company will receive an annual payment of 30% of total net profits in excess of $12 million.
Also, the company plans to expand the gaming floor to accommodate 2,000 machines and add amenities such as a buffet.
Without a permanent license to operate a racino at the Bangor Historic Raceway, Penn National Gaming Inc. (PENN) has concentrated more on its other gaming activities rather than a $75 million slots facility in Bangor, Maine.
After all, the project paled in comparison with the company’s plans to acquire the Midwest riverboats owned by Argosy Gaming Inc. (AGY).
But last week, after hearing from a financial examiner on the condition of Penn National’s financial condition, the Maine Harness Racing Commission changed the status of the Bangor license from conditional to permanent.
Easy way out
Montana lawmakers won’t have any trouble raising taxes on the state’s video poker and keno machine operators, based on the support they received in a recent survey of voters.
According to the telephone survey, raising gaming taxes was favored by 84% of those questioned while only 13% said they would be opposed.
That was not the case with the proposal to add a nickel tax on each bottle or can of soda pop. Voters opposed the measure by 49% compared to the 43% who were in favor.
There was no immediate indication whether the Legislature would raise the gaming tax from the current 15% since the proposed state budget is expected to show a $191 million surplus by 2007.
THE INSIDER: Scientific Games Corporation (SGMS) says it has completed the acquisition of Germany-based Printpool Honsel GmbH.
International Game Technology (IGT) has scheduled an earnings conference call for at 9 a.m. EST, Thursday, Jan. 20.
Gaming analyst Harry Curtis with JP Morgan has raised his target share price for MGM MIRAGE Inc. (MGG) from $72 a share to $87.
Despite political pressure from Connecticut officials, the Interior Department has refused to overturn its recognition of the Shaghticoke Tribal Nation, whose leaders have indicated they hope to locate a casino in Fairfield County.
The Twenty Nine Palms Band of Mission Indians has terminated its management agreement with bankrupt Trump Hotels and Casino Resorts Inc.
Anthony Raymon, 52, general manager of Ameristar Casino St. Charles, Mo., died while jogging last week.
Magna Entertainment Corp. (MECA) has signed an agreement with Online Enterprises Inc. to offer Internet account wagering at all its North American tracks.
Prominent lawyer Russ Herman has been appointed to the Louisiana Racing Commission by Gov. Kathleen Bianco.
The U.S. plans to appeal the ruling by the World Trade Organization that condemned the ban on foreign online gambling.