High Times and Low Crimes at Gulfstream
Gulfstream Park was a hell of a place to work for some employees, full of cocaine and free gambling. When the scheme was finally discovered, hundreds of thousands of dollars had been stolen from the casino and taxpayers, and the "family-friendly" racetrack was a potential public relations nightmare.
A state investigation into the 2007 heist is now just about finished, and the portrait it paints is an ugly one for Gulfstream. It found that Gulfstream employees and an alleged cocaine-slinging ex-con (who'd been convicted of murder) ripped off nearly $289,324 in slot winnings. The Florida Department of Law Enforcement determined that the Hallandale Beach casino -- which like all parimutuels pays a whopping 50 percent tax rate on the money it takes in -- now owes taxpayers $144,662 on that ill-begotten money.
While the ring of employees, which included Gulfstream's then-vice president of gaming, clearly acted in rogue fashion, the investigation also revealed that the casino was being run in a sloppy and irresponsible fashion that may have allowed the crime to be possible in the first place.
One example: The auditing function for the casino's computer system was turned off to hide the ring's tracks, and nobody noticed, a profound failure of oversight.
Gulfstream management also doesn't come across well in the investigation, as executives were shielded from investigators by the park's politically connected attorney, Marc Dunbar.
The entire mess, though, begins with a group of casino employees with a penchant for hard partying. Named in investigative reports as being in the party crowd are then-Vice President of Gaming Eric Lemerand, Casino Compliance Officer Marilyn Ankers, Lead Slot Technician Danny Feliciano, and slot attendants Reinaldo Paonessa, Lorraine Lancaster, Mindy Harper, and Alexandru Bunescu.
The state report alleges that all of them admitted using cocaine either on the casino property or at an off-site party. The source of the cocaine, according to state investigative records, was a Miami Beach man named Sarfraz Janjua, whom they called "Chico" and is pictured at left. Janjua was convicted in 1995 of second-degree murder for his role in a hardware store robbery in Miami. During the robbery, the store owner's grandson shot and killed one of Janjua's cohorts, Danny Milian. The state convicted Janjua and Milian's brother for the murder and Janjua was sentenced to five years in prison.
While Janjua facilitated the good times for the Gulfstream employees, he also came into possession of some of the casino's e-Promo test cards. These cards were supposed to be used only
by staff to test the slot machines. Further, they were supposed to be loaded with very small amounts of money, about $5.
In addition to the test cards, Janjua also was given promotional cards with thousands of dollars in free credits on them. The promotions usually involve cards with $100 or less on them. Gulfstream has a policy forbidding more than $500 in credits being given away without official approval from the casino president.
The investigation eventually determined that Janjua and possible accomplices snared at least $36,000 in free gambling dollars during a two-month period. But here's the kicker: The investigation found that the scheme cashed in $289,324.63 in winning tickets.
That's a huge take, and like so much of the scheme and the investigative findings, it doesn't all add up.
"I've looked at the documents, and I still can't figure it out," says Mardi Gras Gaming President Dan Adkins, who received a copy of the investigation. "There has to be more to the story."
The truth is that no one seems sure how much money really went through the scheme or who all was involved. What's clear is that a lot of money was involved. The test and promotional cards, like everything related to pari-mutuels, are regulated and tracked by the state. To understand how badly Gulfstream abused the privilege of those cards, consider that during July and August 2007, the casino gave away more than $1 million in credits. For comparison, Adkins' Mardi Gras Gaming, a much larger pari-mutuel, issued just $108,000 during that same period.
The scheme was discovered, as so many crimes are, as a result of a stupid mistake. On the night of September 28, 2007, Janjua allegedly walked up to the Players Club window at Gulfstream with a test card meant only for staff and asked that more credits be placed on it. The clerk not only didn't comply with his request but also notified Gulfstream Security Director Mike Chapple. Chapple went to FDLE, which had an office on Gulfstream grounds at the time.
In a joint investigation with the state Department of Business and Professional Regulation, investigators quickly determined that Janjua was supplying the staffers cocaine and that he was being supplied with free gambling credits.
When FDLE special agent Stone interviewed Janjua, he admitted that he received the card and pinpointed Danny Feliciano, the casino's lead slot technician, as the person who supplied it to him.
The investigation determined that Feliciano, pictured at left, never should have been hired in the first place, let alone in such a sensitive position. Investigators determined that Feliciano withheld the fact that he'd been fired from Horizon Edge Casino Cruises in Miami after turning up positive for cocaine after a random drug test. Further, he'd gotten his state license to work at Horizon Edge after falsifying his application and failing to disclose a traffic-related misdemeanor.
Feliciano was quickly suspended and ultimately fired and charged with and convicted of organized fraud and cheating. He was sentenced to two and half years' probation, and a state database shows he's living in Orlando.
One of the slot attendants, Paonesso, was also determined to have falsified his license application when he hid a petty theft conviction. So much for state background checks.
Janjua, who is now 34, was ultimately charged with petty theft. Most of the other employees named in the report were fired (though I understand one remains employed). Lemerand, the highest-ranking employee involved, was quickly suspended and later was allowed to resign in lieu of being fired, according to investigative reports. He was also barred from the property for a year.
(I spoke with Lemerand, who had moved to Michigan, back in 2007 about the investigation. It doesn't appear he was completely candid or honest with me. Read what he said here.)
In the end, not a lot of punishment nor blame has been meted for a crime that stole at least $300,000 from a casino and ripped off tax dollars earmarked for education. Reviewing the state's investigative reports, it's clear that one reason for that is that the casino was so inept at regulating itself that it couldn't be determined who stole what. Either that or Gulfstream hindered the investigation. It was accused of a bit of both.
The state hired a Las Vegas firm, BMM Compliance, to try to pinpoint who was responsible for tampering with the cards. BMM owner John Goetz quickly determined that Gulfstream's internal auditing functions had been turned off in July 2007, right about the time the theft of the cards began. And nobody at the casino realized it.
The shutting down of the auditing function made it impossible for investigators to determine which employees authorized the use of the test and player cards to Janjua and others involved in the scheme.
Goetz, in his investigative report, detailed how the casino should have done daily reports that utilized that auditing function. Since those reports weren't being done at the time, it went unnoticed. And the fraud flourished.
BMM also determined that there weren't clear separation of duties by Gulfstream employees to ensure accountability and foster a clean operation. The fact that thousands of dollars in credits were loaded onto test cards should have been discovered quickly, Goetz wrote. And the winning tickets were also apparently mishandled.
"ALL test transactions should be documented so that proper accounting practices can be used to account for the money both being loaded onto the card and used at the slot machine," BMM wrote in its report. "All tickets should be properly documented and returned to the cage for proper revenue accounting. This clearly was not done at the property."
Basically, the BMM report paints the Gulfstream casino as a mess with few checks and balances. On top of those problems, or perhaps because of them, Gulfstream wasn't exactly stellar in the way it cooperated with the investigation.
And when BMM began requesting records from Gulfstream, it often didn't receive them, according to John Goetz, BMM's technical director. From the state report: "[Goetz] reported to Mitlon Champion, Chief of Slot Operations, that Gulfstream Park has consistently been slow with providing requested documents which has hindered his investigation."
In addition to being slow in producing documents, Gulfstream cut investigators off from communicating with the casino's executives and employees just three weeks into the investigation, routing all communication through Gulfstream's attorney, Marc Dunbar.
"Gulfstream continues to feel that they are on the same page with [state investigators] regarding the inquiry," Dunbar wrote in an October 22 letter to the state. "However, out of concern for the sensitive nature of the investigation and the need to ensure that confidentiality is maintained until its conclusion, it seems to make sense to create a communication funnel through counsel at this point."
Ah, nothing a criminal investigator enjoys more than a "communication funnel" through a lawyer while looking into a casino heist.
Dunbar refused to comment for this piece, but his law firm did send a written statement, which follows in its entirety:
As reported two years ago by the media in the Summer of 2007, Gulfstream Park was targeted by a ring of unscrupulous employees who engaged inactivities which have been the subject of an investigation by state officials. Gulfstream was the first to uncover the activity via its internal security processes and immediately reported the matter to state regulators.
Immediately upon discovering the activities Gulfstream Park and the company's officials began cooperating with state investigators, including discontinuing the employment with individuals allegedly involved in the activities. Gulfstream Park continues to cooperate fully with state officials and awaits the outcome of the investigation into the activities of these individuals.
Until such time as the state officials complete their investigations into these individuals and formally file administrative or criminal sanctions against these individuals, it is inappropriate for Gulfstream Park to comment further.
The media coverage refers to New Times stories published at the time. I wrote the initial story after the Sun-Sentinel killed its own article that had been written by former Sentinel reporter John Holland. You can read about that little controversy here. And here's the follow-up.
Dunbar, incidentally, is known to have a close relationship with DBPR's chief regulator over the pari-mutuel industry, Dave Roberts. Or I should say the former chief regulator. Roberts abruptly resigned last week. The investigation, meanwhile, hasn't been closed by DBPR, which could still levy fines and other sanctions against Gulfstream.
More to the story? We'll see.