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Mayor is a subject in Federal lawsuit

By Josh Resnek

The mayor has again been singled out for apparently conspiring with Wynn Resorts to help Steve Wynn gain a Massachusetts casino gaming license.

Lawyers representing Sterling Suffolk in its $1 billion lawsuit against Wynn Resorts said Monday in Federal District Court that justice must be done to right a wrong in the award of a gaming license to Wynn Resorts.

Sterling Suffolk is fighting a motion by Wynn’s lawyers to have its lawsuit dismissed.

US District Court Judge Patti Saris took the matter under advisement following pleas made by both sides.

She is expected to rule within 4-6 weeks.

Saris grappled with how much weight to give the Massachusetts Gaming Commission’s report as she heard oral arguments on the Racketeer Influenced and Corrupt Organizations suit brought by Sterling Suffolk Racecourse LLC, which claims the company and its executives conspired to conceal key information from the commission.

Saris said Monday that she would review a damning state gambling commission report on Wynn Resorts’ handling of abuse allegations against Steve Wynn as she decides whether to dismiss a $1 billion racketeering lawsuit challenging the company’s casino license.

“This lawsuit has been a bit transformed,” Judge Saris said.

In its lawsuit filed last September, Sterling Suffolk said Wynn Resorts had conspired to win the license through lies, threats, improper conversations with the gambling commission and illegal campaign contributions.

The suit also alleges that FBT Realty, which owned the land for the proposed casino in Everett, agreed to hire a consultant to improperly funnel 3% of the land proceeds to Everett Mayor Carlo DeMaria.

The mayor is alleged in the lawsuit to have either demanded and or to have accepted a kickback from the consultant in return for his favorable treatment of Wynn.

The mayor denies those charges.

“This arrangement fully incentivized Mayor DeMaria to abuse the powers of his office in whatever ways would help maximize the ultimate total sales proceeds from the Everett site,” Sterling Suffolk said in an April court filing.

The Herald Leader published official US Attorney documentation of the proffer agreement he signed with the government requiring him to give the FBI information regarding his knowledge of wrongdoing which would not protect him against wrongdoing of his own, necessarily.

The mayor denies he is an FBI informant or that he has given the FBI any information about the casino land deal.

The agreement he signed with the government proves otherwise.

But Brian Kelly of Nixon Peabody LLP, who represents Steve Wynn, told Judge Saris on Monday that the gambling commission was aware of almost all of the allegations made in the suit.

“These matters were no big secret to the gaming commission, and in fact, they awarded the license despite this,” Kelly said.

Kelly also argued that the commission’s report should help the defendants’ case. The $35 million fine, he said, was based on Wynn Resorts’ failure to properly respond to allegations of sexual abuse against Steve Wynn, but not based on attempts to mislead the commission.

“If the body that was supposedly duped says it wasn’t duped, why are we in federal court on a RICO case?” Kelly said.

Steven Storch of Storch Amini PC, representing Sterling Suffolk, disputed that characterization. He said the commission didn’t have enough evidence to find “willful nondisclosure” by Wynn Resorts, but still felt it had been misled.

“They were concerned enough about how they were misled that they imposed the largest fine ever in the casino business,” Storch said.

Judge Saris noted, as the gambling commission did in its report, that most of the executives in question are no longer with the company, including Steve Wynn and former general counsel Kimmarie Sinatra, who had asked the court last month to dismiss the suit.

If those people were still at the company, Judge Saris said Monday, it would be a “slam dunk” for the racketeering claims to survive a motion to dismiss.

Sterling Suffolk is represented by Inga S. Bernstein and David A. Russcol of Zalkind Duncan & Bernstein LLP, Joseph R. Donohue of Thornton Law Firm LLP and Steven G. Storch, John W. Brewer and Kelly McCullough of Storch Amini PC.

Wynn Resorts and Maddox are represented by Peter A. Biagetti, Samuel M. Starr and David J. Kete of Mintz Levin Cohn Ferris Glovsky and Popeo PC and Mark Holscher of Kirkland & Ellis LLP.

Steve Wynn is represented by Brian T. Kelly and Joshua C.H. Sharp of Nixon Peabody LLP.

Sinatra is represented by James N. Kramer, Michael Todd Scott, Douglas H. Meal and Christine Hanley of Orrick Herrington & Sutcliffe LLP.

FBT Everett Realty LLC is represented by Aaron M. Katz and Joshua S. Levy of Ropes & Gray LLP and Christopher Weld Jr. and Christian G. Kiely of Todd & Weld LLP.

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