Although there has not been an overall comprehensive study, information
is available from a report by the Attorney General, new reports, as
well as a report by the City of San Jose Police Chief. According to
these sources, there have been robberies and assaults of patrons who
had left the card clubs after making money. In the news reports, the
criminals and victims are usually Asian and have been playing Asian
games which frequently have high stakes.
There is debate about the role of the clubs and crime. The City
of San Jose produced a memorandum showing dramatic increases in
crime in the area where a new club opened. But it is hard to know
if that is a result of more people coming into the neighborhood
or criminals following the money. The police chief of San Bruno
states that the club there presents no crime problem.
Some of the crime may be unrelated to the gambling that occurs
at the card clubs. Rather, the club is a suitable place to meet
individuals who are willing to buy stolen property, drugs, or cars
without registration. Other activities such as loan sharking and
credit card/check fraud have been noted. Unfortunately, some of
these crimes are difficult to prosecute. There is some belief that
gambling crimes are victimless. This thinking ignores the role of
organized crime behind some of these. Loan sharking can be difficult
to prosecute because the victim doesn't want to be involved.
In the City of Commerce, seven individuals linked to a Chicago
crime syndicate were indicted by a federal grand jury for racketeering,
extortion, and conspiracy. The loan sharking and bookmaking operations
occurred in the California Bell Club before the Gaming Registration
Act was fully implemented in 1984.
Since then, however, there have been other incidents. A Santa Clara
grand jury indicted 14 individuals associated with the Garden City
card club. Skimming of approximately $4 million in club revenues
occurred. The subjects were eventually convicted of filing false
income tax returns, making illegal campaign contributions, theft
of club assets, and perjury. This is a case where upper level management
of the club was involved. While less frequent than participation
by low or mid-level employees, the scope for criminal activity is
greater when upper level management is involved. Another example
was the attempted effort of Chinese organized crime figures to purchase
a card club.
Detailed information about the card club in Bell Gardens, the Bicycle
Club, sheds light on criminal acts in card clubs. The Federal government
was a part owner. The club had been seized because it was financed
through ill-gotten gains. Following is a listing of some
important developments at the club:
In 1986, Asian games were introduced and club revenues went from around
$12 million per year to $60 million, then $80 million annually.
One of the club's pit bosses was arrested and eventually plead guilty
to seven counts of extortion and weapons' violations.
Wall Street Journal article identified the Asian Games manager as
a member of an Asian crime family.
The Internal Revenue Service fined the club $4.2 million for ignoring
laws designed to prevent money laundering.
Government audits turned up a lack of adequate cash reporting and
internal accounting controls.
The Attorney General alleged that the founder is skimming millions
in the form of kickbacks from the manager of the Asian games.
Three more employees were arrested involving possession of automatic
weapons and heroin smuggling. They provided evidence that led to the
arrest of the manager for Asian games on conspiracy and extortion
charges.
A new Asian Games Manager was hired. Part of the job was for her to
grant credit to gamblers and pay operating expenses. Her money came
from an organized crime figure.
The sale of the club was discussed with organized crime figures. One
is in Nevada's "Black Book," meaning he is barred from even
walking into a casino. The deal eventually fell through.
The casino manager suspends the next Asian games manager. The City
of Bell Gardens then forced the manager to reverse the action and
canceled the work permit of the club security manager. The Department
of Justice suspended the license of Asian games manager and that of
the Casino manager.
The Attorney General alleged that the federal trustee had knowingly
allowed illegal activities at the club, including loan sharking, kickbacks,
and cheating.
The television news show, "60 Minutes" did a report on the
club. They were able to catch on camera the laundering of money at
the club.
Loan sharking has also been an issue for the clubs. This crime
is particularly dangerous for the problem gambler who needs money
for gambling. Because of their compulsion it is easy to end up in
debt to a loan shark.
The purpose of detailing some of the crime is to give a general
sense of some of the problems that have occurred. A more detailed
listing of card club crime can be found in the information available
from the Department of Justice.
|
