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Wednesday, April 17, 2013

Employer Blames Casino for $4 Million Embezzlement

 A candy wholesaler sued an Ameristar casino for $4 million, claiming it "enticed and enabled" a worker who embezzled the money and blew it on slot machines.
     Colombo Candy & Tobacco Wholesale Co. dba Colombo Distribution sued Ameristar Casino Council Bluffs in Douglas County Court, Tulsa.
     It claims its employee, Jane Doe, blew more than $3 million of the $4 million she embezzled at the Ameristar casino in Council Bluffs, Iowa.
     Colombo claims Doe worked as its controller from July 2010 to July 2012. Doe, who is not a party to the case, was in charge of all company finances until it discovered her massive theft and fired her, Colombo says in the complaint.
     "Doe accomplished her embezzlement by taking advantage of her position
     as controller to, among other things, inflate inventory and accounts receivable, and manipulate payroll," the complaint states. "Doe used Automated Clearing House ('ACH') transactions to deposit the embezzled funds into Doe's own accounts, against which she then cashed checks at Ameristar, made cash withdrawals at Ameristar and otherwise transferred the money to Ameristar.
     "Doe has entered into a settlement agreement that admits to the embezzlement from plaintiff, and admits to liability to plaintiff. Doe has signed a Stipulation for Judgment and a Judgment by Confession granting plaintiff a judgment against Doe in the amount of four million ninety-nine thousand four-hundred one and 55/100 dollars ($4,099,401.55). Doe cannot repay the amount embezzled or stolen from plaintiff.
     "Doe's annual salary from plaintiff was only approximately $62,000 per year. Yet in 2011 alone, Doe lost in excess of $1,750,000 to Ameristar.
     "Ameristar knew the money Doe was using to gamble was embezzled or stolen or had information that would lead a reasonable person to believe the money Doe was using to gamble was embezzled or stolen."
     Colombo Candy claims the casino regularly cashed $10,000 checks for Doe.
     "For example, within the two-week period between February 22, 2011 and March 7, 2011, Ameristar cashed 16 checks for $10,000 each, for a total of $160,000. Over the Labor Day weekend of 2011, Ameristar cashed checks totaling $100,000 for Doe," the complaint states.
     "Ameristar patrons specifically asked Ameristar cashiers what the source of Doe's funding was.
     "Ameristar deliberately closed its eyes to the source of Doe's funding that Doe transferred to Ameristar in order to gamble, in order to avoid meaningful exposure to information that would have provided Ameristar with knowledge of Doe's embezzlement of Plaintiff's money."
     Impressed by Doe's big spending, Colombo says, the casino treated her like a VIP.
     "Ameristar gave special privileges to Doe, including permitting her to go behind the cashier's 'cage' where patrons generally are not permitted in order to obtain cash. Doe would routinely obtain cash in $10,000 increments several times a night.
     "Ameristar deliberately acquired video-slot machines to induce protracted high-risk gambling for Doe, modifying particular video-slot machines specifically for Doe on at least three occasions to increase the amount of money Doe could spend on a single 'spin' or game. Ameristar, on at least one occasion, upon getting a new or modified machine, called Doe and held the machine 'off limits' to other patrons until Doe could be the first to play it.
     "Ameristar's video-slot machines are designed to create and enhance an illusion of control over the outcome of the 'spin' or 'game played,' and Ameristar actively encouraged that belief by pointing out to Doe which machines had recently paid out a 'jackpot.'
     "Ameristar knew which video-slot machines were set to pay out at specific return rates and on multiple occasions Ameristar staff tipped off, or otherwise advised and steered Doe toward specific video-slot machines to play or avoid.
     "Ameristar staff would, when Doe was losing money at a particular machine, direct her to another machine where she usually had a prompt 'win.' Ameristar staff would give machines Doe was using a 'rub' for luck.
     "Ameristar staff would watch Doe gamble, including the cashiers who would leave the 'cage' to watch. Ameristar used multiple versions of the same 'game' with different 'pay-back' percentages, concealed from Doe and distorting her understanding of how the machines work.
     "Ameristar employees would guard machines Doe was using so that she could leave to use the bathroom and come back to the same machines."
     Colombo claims that Doe became so notorious at the casino that its "floor staff would monitor Doe's gambling to predict when she would next be coming in, and seek to change their own work schedules so as to be working when Doe was gambling in order to personally profit from her tips."
     Ameristar cashed $3 million in checks for Doe in 2011 alone, Colombo claims.
     Although the casino "has policies and procedures to detect and aid problem gamblers," and knew Doe was a problem gambler, it "intentionally ignored its own policies, and intentionally refused to talk to Doe about her problem gambling," according to the complaint.
     "Ameristar's excessive and extraordinary inducement of Doe to gamble, Ameristar's willful blindness to the source of Doe's funds she used for gambling, and Ameristar's failure to follow its own policies caused or substantially contributed to Doe's embezzlement from plaintiff and plaintiff's transfer of funds to Ameristar," the complaint states.
     Colombo Candy seeks restitution, an accounting of all the money Doe blew at the casino, and damages for aiding and abetting, fraudulent transfer and unjust enrichment.
     It is represented by Jill Robb Ackerman with Baird Holm of Omaha, Neb.

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