Former FBI agent Stern, Wynn’s Former Top Dog Of Security, Claimed Little Knowledge of Land Transaction
By Josh Resnek
The former Senior Vice President for Corporate Security at Wynn Resorts was James C. Stern, a 25 year special agent for the FBI. He departed the company last April just after the Massachusetts Gaming Commission held a public forum to ask Wynn executives about the sexual harassment cases involving their co-founder Steve Wynn.
For those of you who think this is old news, Stern’s removal came only ten months ago.
The casino land deal and everything having to do with it remains a current topic in legal circles and among many lawyers now litigating law cases related to the land deal and the subsequent award of the casino license to Wynn Resorts.
The Boston office of the FBI has shown a great deal of deference to the real culprits who stole the casino license from the Sterling Group in Revere so Steve Wynn could buy it for the Wynn Corporation from the Massachusetts Gaming Commission at a discount.
The folks from Sterling passed the law and order test to gain the license but lost it to Wynn, who had to resign from his own company in disgrace for alleged acts of egregious sexual harassment and worse, allegations about which the FBI claims to have had no knowledge of after conducting a thorough investigation.
This proved an old Massachusetts political adage that the good guys with all the qualifications never win over the bad guys who won, who never should have been awarded the license.
How the land was found, who originally bought it, how the FBI began a “thorough” investigation that somehow left out Steve Crosby, the former MGC chair and Paul Lohnes, his business partner to whom he owed money, is the stuff of Boston office FBI riddles.
There is additionally the question to be answered of whether or not, as he is alleged to have done, Mayor Carlo DeMaria received a kickback for aiding in awarding Wynn the land over Sterling. How much he was allegedly paid, how he was paid, who paid him, are questions raised in legal suits arising over the land acquisition.
So to is the ongoing wild goose chase prosecution by the US Attorney’s Office and the FBI of Gary DeCicco, the original landowner. Lohnes was also an owner of the land with DeCicco. Lohnes is free as a bird. So too is Crosby, and is now in position to gain millions of dollars cut from the casino price when the MGC gave Wynn a $40 million discount to buy the land for $35 million because it was tainted by a convicted felon owning part of it.
The FBI has ensnared DeCicco in questionable investigations and indictments, even locking him up for 15 months while trying to force him to become an FBI informant against the convicted felon who owned part of the land. DeCicco has refused. He has paid the price. He recently filed a prosecutorial misconduct case against the Boston office of the FBI and Assistant US Attorney Kristina Barclay.
In another Federal case of two city hall Boston officials convicted by a jury or extortion, the judge overturned the jury decision last week.
This was Barclay’s case. The judge went on to say that the government had skirted prosecutorial misconduct, an allegation lodged by DeCicco in his case which was also prosecuted by Barclay.
During the MGC hearings last year, Stern testified that he ordered clandestine investigations into former Wynn employees who might be sharing information with the media.
The efficacy and legality of Boston’s former FBI chief ordering clandestine investigations is not up for debate. While it is uncertain to
what exact lengths Stern went to do his bosses bidding, it is believed wire taps, private investigators and even present FBI agents may have helped out Stern during his tenure at Encore in Everett.
Stern admitted he had Wynn co-founder, former board member and estranged wife of Steve Wynn, Elaine Wynn, followed. The revelation was even news to Elaine who was sitting in the gallery at the hearings. By the weekend following the public hearings, Stern departed Wynn Resorts.
The testimony by Stern was discomforting. Prior to joining Wynn, Stern was a Special Agent with the FBI for over 25 years where he worked on organized crime issues in Asia. His specialty was working on gaming-related investigations. He admitted to the MGC that he maintained ties with current FBI agents across the country with whom he shared information. So here was a private company, Wynn, dishing information on individual citizens, enemies of Wynn, to law enforcement.
It is disconcerting and a bit difficult to comprehend Stern’s alleged poverty of information about the land deal. With all of his self- professed ties to law enforcement, Stern seemed to know little about the land transaction in Everett. According to a meeting Stern had with the FBI on January 15, 2015, just a few months after Wynn was awarded the license, Stern recapped what he knew about the land transaction involving Wynn Resorts and FBT Everett Realty. His revelations were akin to the feelings one has when seated inside an empty room with the door closed for quite a while. That is to say, he revealed nothing but quiet when asked about the land deal.
At Encore Stern had a staff of approximately 800 that included five directors, numerous assistant directors, case managers and all security personnel in both the U.S. and China. His organization was responsible for corporate investigations, physical security of Wynn properties and Cyber Security. Stern hired former FBI agents. One he plucked from the FBI was Michael Carazza who, oddly enough, was central in the investigation of FBT Everett Realty land deal before he jumped over to work for Wynn’s development in Everett. Carazza has since left Wynn.
For all of the trouble we read about the land transaction, Stern claimed to know very little about it. He had delegated the background investigation to a minion at Wynn and the owners provided to Wynn were, Paul Lohnes, Anthony Gattineri and Dustin DeNunzio. There was no mention of another former partner who had a criminal past. Then, in July 2013, once the Massachusetts State Police were briefed on the existence of jailhouse tapes between the former FBT partner and a known associate of the New England La Cosa Nostra, Stern got word of the former FBT partner’s name. He then conducted research on that person. What he found made him believe that had the person’s name came up in December of 2012, Stern would have reported that they [Wynn] can’t do the project because the former FBT partner was “way out there and it hit me like a brick.” This was the same partner that the FBI believed Lohnes was hiding from the land transaction.
Stern said that he was concerned the Massachusetts Gaming Commission’s investigative branch had blind-sided Wynn with the revelation of the former FBT partner in late July to Las Vegas. Stern at first believed the trip out to see executives at Wynn was a “boondoggle” to get out of Boston. Instead, Stern and his investigators had been caught off guard.
What did Stern do once it was revealed that someone at FBT was hiding something? He appeared to contract a severe case of selective amnesia. He told the FBI that he did not recall looking into the purchase of the land in Everett nor did he recall another request for any more information and he dropped it telling the agents that he was very busy with other matters and did not have time to do things if there wasn’t a request for information. Our guess is that Steve Wynn, who was then still very much an overpowering CEO of Wynn, Matt Maddox, then president of Wynn and Kim Sinatra, then general counsel of Wynn did not need to look into the matter further. The reason? The crew at ML Strategies crafted a solution for the discounted land price. Gattineri, DeNunzio and the guy with the criminal past were all indicted (later cleared). Lohnes whistled past the courthouse.
Stern, like others at Wynn and ML Strategies, knew nothing of the jailhouse tapes in early 2013. However, once the Mass State Police were briefed, FBT was backdating notes to get the guy with the criminal-past out of FBT even earlier by backdating business documents.
Everett has its casino, but how it got here is just now coming to light. This pattern of Wynn and its powerful lobbying firm, ML Strategies, working with law enforcement is worthy of an investigation of its own.
The revolving door of Wynn with the FBI and ML Strategies with former lawmakers is also something to look more closely into. Wynn had a dream team. Stern was a bit player but brought a closeness with him to the FBI office in Boston.
Stern’s meeting with the FBI was likely just a staged event to put something on the record to help Assistant US Attorney Kristina Barclay prosecute DeNunzio (a fall guy for Lohnes), Gattineri (kept in the dark by Lohnes and DeNunzio) and the guy with the criminal past (long chased by both state and federal authorities). The trial of the three men had been set for October 2015, but, after numerous delays it started in April 2016, just three months before Stern gave his account of not knowing much about the land deal.
If Stern was in the dark on the land deal in Everett, it was because he was told not to shine a light of any kind on the sorry mess.