$40 Million “Discount” Haunts Wynn Resorts Land Deal in Court Reversal

By Josh Resnek

Former owners of the land the Encore casino and hotel is built on are getting another chance at recovering $40 million cut off the $75 million purchase price as a result of SJC ruling.

The state’s highest court handed a win Monday to the former owners ruling that a judge had erroneously dismissed a lawsuit they filed against the Massachusetts Gaming Commission in a bid to collect an additional $40 million for the Everett land.

The state Supreme Judicial Court found that the Gaming Commission took “highly unusual” action in 2013 after discovering that a business- man with a criminal record and organized crime ties was suspected of having a hidden interest in FBT Everett Realty LLC, which had negotiated a deal to sell the Everett property to Wynn for $75 million, according to a report in the Boston Globe.

The decision dredges up years of questionable actions, stuttering and half-hearted investigations and the acknowledged effort of a combination of powerful interests to convey the land at a discount to Wynn.

The $40 million reduction in the price of the land is perceived by some as a bonus given to former Wynn Resorts president Stephen Wynn.

Wynn negotiated for the sale of the land with Everett Mayor Carlo DeMaria and the owners of the land, FBT Realty.

At the time, the commission was considering Wynn’s application for one of three highly coveted casino licenses being offered by the state. When the commission’s investigators questioned FTB about Charles Lightbody’s suspected interest, the ownership group said he previously had a stake in the property but had sold it.

Instead of completing an investigation of FBT’s ownership, the commission “made favorable consideration of the application subject to lowering the amount of money the owners of FBT would receive for the property, thereby giving one private party, Wynn, a multimillion-dollar windfall at the expense of another private party, FBT,” Justice Scott Kafker wrote on behalf of the court in a 38-page decision, the Globe noted in its article appearing in Tuesday’s newspaper.

Wynn’s casino license was approved after it slashed the purchase price for the 35 acres on the Mystic River to $35 million, the estimated value of the land if the buyer wasn’t building a casino.

On Monday, the SJC reversed a Superior Court judge’s dismissal of FBT’s claim that the sharp price cut constituted an unjust “regulatory taking” by the commission.

“Whether the commission directed such a compelled transfer of property, or merely accepted it as a cure to its concerns about undisclosed criminal ownership interests at FBT, cannot be decided without further discovery,” the court wrote, allowing the suit to go forward on the regulatory claim.

The court found there were disputed facts about “exactly what the commission expected or required Wynn to do, and what Wynn did on its own initiative.”

After FBT filed the suit against the Gaming Commission in 2017 in a bid to recover the lost $40 million, the commission filed a claim against Wynn, arguing that Wynn would be liable if any damages are awarded, the Globe reported.

During the license vetting process, investigators learned that correction officers recorded Lightbody talking about his interest in the land and an anticipated windfall from its sale during a December 2012 conversation with Darin Bufalino, a reputed mobster serving a state prison sentence for extortion, according to court proceedings.

In one call, Lightbody was heard saying it was a “good thing … nobody knows who’s involved,” according to court filings.Bufalino suggested he “double-blind it” and Lightbody responded, “Well, that’s what we’re doing.”

FBT’s principals, Dustin DeNunzio, Anthony Gattineri, and Paul Lohnes, told commission investigators that Lightbody once had an ownership interest, but it had been transferred to Gattineri before the option agreement with Wynn was signed.“FBT alleges — and the commission denies — that the commissioners were angered by what they perceived as the FBT principals’ lack of candor and obstructiveness, and sought to punish them by exacting a financial penalty on FBT,” the SJC wrote in its decision, adding that the limited evidence turned over in the civil suit “reveals some evidence supporting FBT’s allegation.”

In October 2014, Lightbody, DeNunzio, and Gattineri were indicted on federal charges involving an alleged scheme to hide Lightbody’s financial interest in the land. A jury acquitted the men of all charges following a three-week trial the following year. The defense argued that Lightbody sold his 12 percent interest in the property to Gattineri for a $1.7 promissory note before the group reached a deal with Wynn to sell the land, the Globe reported.

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