$B Encore suit moves forward


In an ongoing federal case with billions of dollars at stake and claims of international bribery, political payoffs, shadowy Mafia figures and rampant sexual misconduct, the First Circuit in Massachusetts tried Monday to figure out whether Massachusetts gaming officials made a mistake in choosing who should build the Encore Casino and Hotel.

The discourse between the attorneys was like a book reading from the pages of Walter Pavlo and Josh Resnek’s annotated investigative book to be published in the spring titled, “Encore-Steve Wynn’s Last Encore.”

The battle over the project — a $2.6 billion resort has in one corner Steve Wynn, the billionaire Las Vegas casino magnate who ultimately got the license, and in the other Suffolk Downs, a Boston-area horse-racing track that opened in 1935 and had been viewed as the local favorite.

Wynn came to Everett and fell in love with 33 acres of the most polluted land in the nation, the former Monsanto Chemical site.

Suffolk sued under federal anti-racketeering law, claiming that Wynn and his company should have been disqualified on the basis of bribery, fraud, and other serious misconduct in which they were engaged.

As Suffolk tells it, however, Wynn’s success was the result of a long pattern of misconduct including association with mobsters and political corruption. Wynn has also been accused of paying secret settlements to cover up dozens of accusations of sexual assault, which resulted in Massachusetts gaming authorities fining his company $35 million even as they awarded it the right to build the resort.

Many on the Suffolk side believe Wynn bought the license from the MGC. Suffolk claimed that Wynn’s company lied under oath and submitted falsified documents regarding its knowledge that the toxic former chemical plant site where Encore was built was owned by multiple convicted felons and a reputed Mafia member, which only came to light through an FBI wiretap of a prison conversation in an unrelated investigation.

Suffolk also claimed that Wynn improperly funneled money to the mayor of Everett, Carlo DeMaria, who described the casino project as “tremendous” for the working-class city because “we will no longer be the butt end of Boston.” This was part of a pattern because Wynn also bribed political officials in Macau, Suffolk claimed.

Suffolk had its own troubles in the process. It had to cancel its initial partnership with the company behind Caesars Palace in Las Vegas because of reputed mob ties, and its early plan to site a casino in East Boston was rejected by local voters.

The argument appeared to gain traction Monday as the federal appeals court considered whether Suffolk’s case was properly dismissed in November 2019.

U.S. Circuit Judge David Barron focused on the claim that Wynn and his company “had a way of doing business that’s sufficiently criminal that going forward there’s a high risk that they will continue to affiliate with organized crime figures and hide that.”

“What’s the problem” with calling that a racketeering scheme, Barron wanted to know. “I don’t understand that. I just don’t see why that’s not a reasonable inference.”

Barron pointed to a case where a drug compounding center in Massachusetts caused a meningitis outbreak and officials were indicted under RICO because their way of doing business could cause future harm.

One of the defense lawyers, Aaron Katz of Ropes & Gray in Boston, argued that no other court had ever applied RICO to lying on a casino application and that doing so “would be a radical departure.”

“Why is that a radical departure?” asked Barron, unconvinced.

Suffolk ran into trouble with the judges because it had partnered with Mohegan Sun, a Connecticut casino, and the application was submitted under Mohegan’s name.

“You’re not the directly injured party,” said U.S. Circuit Judge Sandra Lynch. “You’ve made a foreseeability argument but that doesn’t get you very far.”

A great deal of this article was extracted and edited from a Courthouse News Service article written by Thomas Harrison.

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