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How casino tribe jumped into bed with the
mob
The gambling money flowed so freely that one
or more members of an
organized crime family showed up one day
with $300,000 in a duffel bag to spend on races, according to a Treasury Department document. After the FBI's initial reluctance to investigate, the scheme eventually resulted in an 88-count indictment and 17 defendants in a New York federal court. They are accused in a $200 million illegal gambling and money laundering ring. Allegations include extortion and race fixing through horse doping. Most have pleaded guilty or are scheduled to do so this week. March 24, the U.S. Treasury Department announced the tribe had agreed to pay a $1 million fine in six monthly installments for negligence uncovered through "Seabiscuit." Gordon Warrior, the tribe's vice president, said Anthony Street told him he negotiated the fine down from $65 million. April 2, 2006 Oklahoma: Inquiry uncovers casino scheme By Anthony Thornton The Oklahoman TONKAWA - This is the story of how an Oklahoma Indian tribe, knowingly or unknowingly, jumped into bed with the mob. It's also the story of a conspiracy that almost wasn't uncovered, and of one federal regulatory body's exhaustive efforts to unravel the scheme but keep the tribe's offending business open. At a time when other tribes were beginning to close off-track betting parlors for lack of business, the Tonkawa Casino's was booming. In 2004, a staggering $60 million in wagers passed through the metal building's 200-square-foot room for horse racing bets, federal documents show. That figure represented 68 percent of the casino's total gross revenue, far beyond the level that should have raised red flags, several industry sources said. The gambling money flowed so freely that one or more members of an organized crime family showed up one day with $300,000 in a duffel bag to spend on races, according to a Treasury Department document. The jackpot resulted from a meeting four years earlier between casino manager Edward Street, whose previous job was in road construction, and two men, one from New York, the other from Las Vegas. Those two men, whom Street described as "just average guys," turned out to be connected with the Gambino crime family. Although there have been other allegations of organized crime penetrating tribal casinos nationally, this was by far the largest incursion, federal officials said. After the FBI's initial reluctance to investigate, the scheme eventually resulted in an 88-count indictment and 17 defendants in a New York federal court. They are accused in a $200 million illegal gambling and money laundering ring. Allegations include extortion and race fixing through horse doping. Most have pleaded guilty or are scheduled to do so this week. No Oklahomans have been indicted, but the financial consequences are severe. The Tonkawa Nation recently agreed to pay a $1 million fine without admitting involvement. Street, the casino manager, was left jobless and facing a $1.5 million fine. The casino -- the lifeblood for funding tribal programs -- was closed in February by federal regulators. The case also led to the creation of the Indian Gaming Working Group, a task force designed to make federal agencies share information about crime in America's $20 billion tribal casino industry. New York finds Tonkawa In the fall of 2000, two high-stakes gamblers showed up at the Tonkawa Casino and placed bets on races simulcast inside the metal building on a Kay County back road. Street said he was recruited to reopen the casino in late 1999 while on a trip home from a road construction job. Separated from the tribal administrative office only by a wall, the casino is part of the tribe's small compound called Fort Oakland, a mile east of Tonkawa. According to a federal indictment issued last year, Anthony Uvari and David Appelbaum had arrived to set up a major piece of a horse-race betting network. Their choice wasn't made haphazardly. The federal Bank Secrecy Act requires casinos to file reports on gamblers who spend or win $10,000 in any 24-hour period. Investigators say the men or their operatives had placed large horse-racing bets through the Tonkawa Casino undetected. That success, investigators allege, prompted the men to expand their horizons beyond their own bets. It also precipitated the casino's role in what federal agents labeled the Uvari Group. Tonkawa Casino joined an Idaho tribal casino and off-shore betting outposts in the Caribbean and the United Kingdom as sites where the Uvari Group ran its alleged scheme, according to a 2005 indictment. The alleged operation involved setting up betting accounts under the ringleaders' names and allowing gamblers to bet anonymously by phone using those accounts. This created a betting volume so high that the betting parlors offered commissions on every wager. Ringleaders passed on part of the commission to gamblers as an incentive to continue betting through them, the indictment alleges. FBI needed prodding The investigation began in the Portland, Ore., field office of the National Indian Gaming Commission in 2001. It very nearly stalled there. An investigator had uncovered financial discrepancies during a routine audit of the Coeur d'Alene Tribe's casino in Idaho, said Chuck Choney, who at the time was concluding a 27-year FBI career in Oklahoma City. The investigator dug deeper and found large amounts of money going through the casino's off-track betting parlor not being reported to the tribe, Choney said. He said the Portland investigator contacted the local FBI office in 2002 but got the cold shoulder. "They said they couldn't handle it due to higher-profile cases," he said. In 2003, shortly after Choney's appointment as one of three commissioners to the National Indian Gaming Commission, he learned of the Idaho case and his old employer's disinterest. By then, the FBI was examining the Uvari Group's use of a Baltimore bank to funnel money. Choney said he helped tie the pieces together, including large bets being made at the Idaho and Tonkawa casinos in violation of the Bank Secrecy Act's $10,000 reporting threshold. "Now we knew we had something big, and I realized we had infiltration of organized crime in tribal gaming, which was something we all feared would happen someday," Choney said. The investigation received a code name: "Seabiscuit." Choney said he met separately with leaders of the Idaho tribe and the Tonkawas, and both "were very defensive. ... They were putting the blame on everybody but themselves." "I told them, if your gaming commissioners had been doing their job, this wouldn't have happened," Choney said. The Indian Gaming Regulatory Act requires tribes to employ commissioners to oversee casinos and ensure compliance with federal rules. The Tonkawas' three elected business committee members also are the tribe's gaming commissioners. That includes the tribal president. The current president is Anthony Street, the casino manager's brother. He has not returned phone calls seeking comment for this story. Two other men were president during the casino's involvement with the Uvari Group. Anthony Street issued a news release last week saying the tribe's gaming commission is independent and that the casino adopted written policies to comply with the Bank Secrecy Act after the indictment was issued. He said the tribe underwent independent audits during the time in question, "and no problems with bank secrecy issues were ever disclosed to the tribe." March 24, the U.S. Treasury Department announced the tribe had agreed to pay a $1 million fine in six monthly installments for negligence uncovered through "Seabiscuit." Gordon Warrior, the tribe's vice president, said Anthony Street told him he negotiated the fine down from $65 million. The fine payments are to begin 90 days after the Tonkawas open their Native Lights casino near the old Chilocco Indian School north of Newkirk on U.S. 177. Choney said neither of the Tonkawas' casinos will be opening any time soon. First, the tribe must pay what he called "a huge fine" to the National Indian Gaming Commission to resolve separate federal violations. Pressure increases As Choney's old employer, the FBI, was closing in on the Uvari Group, his new one, the Indian Gaming Commission, seemed in no hurry to close the Tonkawa Casino. That agency's public document illustrates a reluctance to close the casino, despite confirmation of its involvement with organized crime. Edward Street ran the casino for six years without an approved management contract as required by federal law, which Choney said is among the agency's most serious violations. Commission investigators frequently visited the casino and issued several warnings, beginning Dec. 1, 1999, but weren't allowed to close the casino until two months ago. Until then, commission investigators repeatedly demanded documents that never came, and Edward Street provided contracts that violate the Indian Gaming Regulatory Act, records show. That law requires, among other things, that tribes receive at least 70 percent of their casinos revenue. Under contracts approved by tribal leaders, Edward Street's company, Oakland Enterprises, was making 40 percent of off-track betting revenue and 35 percent of gaming machine revenue, federal documents show. Warrior said it actually was a 50-50 split. Despite the FBI investigation that Choney had helped spur, the three commissioners allowed the casino to remain open for 13 months after the indictment. The indictment was issued two months after Oklahoma voters passed a law allowing for expanded tribal casino gambling in return for the state receiving a cut of the profits. One major selling point was that it would provide state oversight of a growing industry. However, state regulators simply ensure that the state is getting its share of the money. It would not have detected the Tonkawa Casino's involvement with the mob, state officials concede. Ex-manager claims ignorance The former casino manager said both federal agencies have portrayed him unfairly. "I don't think I've gotten a fair shake in this deal. All I do is try to do good for my people," Edward Street said. He was interviewed on the front porch of his 3,500-square-foot brick home in Tonkawa, which has a large indoor swimming pool. "When I came in and took it (the casino) over, the tribe had nothing," he said. "For them to come in and take it away, that hurts." Edward Street said in his early days as manager, little training was available to steer tribes clear of outside influences. Choney's agency denies that claim. Neither the FBI nor the Indian Gaming Commission has alleged criminal activity by Edward Street or any tribal official. "The bottom line is, you have some sweet-talking LCN (La Cosa Nostra) figures who came in and took advantage of the tribe's naivete," Choney said. "We don't know that any bribes were given. That has not been proven," he said. "Nobody ever offered me anything," Edward Street said, "and I've never taken anything." However, under his contract, he would have received a portion from each horse wager. Edward Street remembers Uvari and Appelbaum as regular customers who had "all the credibility" of normal high-stakes gamblers. "They were just like me or you. If you want to come in and play a game of bingo, who am I to stop you?" Edward Street asked. Choney said that explanation isn't plausible. Federal officials also scoff at Edward Street's contention that he ended the casino's association with the New Yorkers in 2002, a week after he learned who they were. That wouldn't explain how $60 million went through the casino's off-track betting parlor in 2004, investigators said. In any event, Edward Street's days as a casino manager are done, Choney said. In addition, Edward Street agreed to pay a $1.5 million fine to the Treasury Department's Financial Crimes Enforcement Network for his role in the money-laundering scheme. Treasury officials said they can take civil action, but not impose criminal charges, for nonpayment. Dire impact looms Back at Fort Oakland, the 440-member tribe is feeling the effects of the casino closing. "My social life has been disrupted," tribal member Marilyn Cornell said. Like many Tonkawas, she considered the casino a gathering spot for more than just gambling. It regularly hosted meals for elders, she said. Casino revenue also produced thrice-yearly payments of $250 to each tribal member and funded tribal housing repairs, said Warrior, the vice president. The casino, he said, "was our backbone. With that thing down, they might as well have shut the tribe down." Tribe officials considered the new casino as the only way to pay the fine stemming from the "Seabiscuit" investigation. "They're not worried about making that," Warrior said, referring to the $1 million fine. Warrior said he wasn't aware of Choney's plan to prevent the new casino from opening until the tribe pays a separate fine. "There's all kinds of rumors around," he said. "I want to see it on paper before I believe it." http://newsok.com/print.php?article=1804497 |
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