Employees at Gulfstream Park Traded Gambling Money for Cocaine, Investigators Say
For some employees, Gulfstream Park was a hell of a place to work, full of cocaine and free gambling. When the scheme was finally discovered in 2007, hundreds of thousands of dollars had been stolen from the casino and taxpayers, and now the "family friendly" racetrack is left with a potential public-relations nightmare.
A state investigation is just about finished, and the portrait it paints is an ugly one for Gulfstream. According to investigators, Gulfstream employees and their friend, a cocaine-slinging ex-con once convicted of murder, ripped off nearly $289,324 in slot winnings. The Florida Department of Law Enforcement determined that the Hallandale Beach casino now owes taxpayers $144,662 on that ill-begotten money, equal to the heavily regulated casino's 50 percent tax rate.
The ring of employees, which included highly placed supervisors, clearly acted in rogue fashion. The investigation also revealed that Gulfstream's sloppy management practices may have allowed the crime to occur. One example: The auditing function for the casino's computer system was turned off, presumably by ring members to hide their tracks. Worse than that, nobody noticed.
Gulfstream management also doesn't come across well in the investigation, as executives were shielded from investigators by the park's politically connected attorney, Marc Dunbar, and the casino was slow in producing crucial documents.
The entire mess, though, begins with a group of casino employees with a penchant for hard partying. Named in investigative reports as being in the party crowd are then-Vice President of Gaming Eric Lemerand, Casino Compliance Officer Marilyn Ankers, Lead Slot Technician Danny Feliciano, and slot attendants Reinaldo Paonessa, Lorraine Lancaster, Mindy Harper, and Alexandru Bunescu.
The state report alleges that all of them admitted using cocaine either on the casino property or at an off-site party. The source of the cocaine, according to state investigative records, was Sarfraz Janjua, a 34-year-old Miami Beach resident whom the casino workers called "Chico."
In 1995, Janjua was convicted of robbery and murder after a holdup gone bad at a hardware store. One of his cohorts, Danny Milian, was killed by the store owner's grandson, and Janjua was convicted for his death and served five years in prison.
While Janjua facilitated the good times at Gulfstream, he also came into possession of some of the casino's e-Promo test cards. These cards were supposed to be used only by staff to test the slot machines. Further, they were supposed to be loaded with very small amounts of money, about $5 each.
Besides the test cards, Janjua also was given promotional cards with thousands of dollars in free credits on them. The promotions usually involve cards with $100 or less on them. Gulfstream has a policy forbidding more than $500 in credits from being given away without official approval from the casino president.
The investigation eventually determined that Janjua and possible accomplices snared at least $36,000 in free gambling money during a two-month period. But here's the kicker: The investigation found that the scheme cashed in $289,324 in winning tickets.
Like so many of the sketchy investigative findings, it doesn't all add up.
"I've looked at the documents, and I still can't figure it out," says Mardi Gras Gaming President Dan Adkins, who received a copy of the investigation. "There has to be more to the story."
The test and promotional cards, like everything related to the pari-mutuels, are regulated and tracked by the state. To understand how badly Gulfstream abused the privilege of those cards, consider that during July and August 2007, the casino gave away more than $1 million in credits. For comparison, Mardi Gras Gaming, a much larger pari-mutuel, issued just $108,000 during that same period.
The scheme was discovered, as so many crimes are, as a result of a stupid mistake. On the night of September 28, 2007, Janjua allegedly walked up to the Players Club window at Gulfstream with a test card meant only for staff and asked that more credits be placed on it. The clerk instead notified Mike Chapple, Gulfstream's security director. Chapple went to the Florida Department of Law Enforcement, which had an office on Gulfstream grounds at the time.
When FDLE Special Agent Alan Stone interviewed Janjua, he admitted that he received the card and pinpointed Feliciano, the casino's lead slot technician, as the person who supplied it to him. The investigation determined that Feliciano never should have been hired in the first place, let alone in such a sensitive position. Investigators determined that Feliciano withheld the fact that he'd been fired from Horizon Edge Casino Cruises in Miami after turning up positive for cocaine during a random drug test. Further, he'd gotten his state license to work at Horizon Edge after falsifying his application and failing to disclose a traffic-related misdemeanor.
Feliciano was suspended and ultimately fired and charged with and convicted of organized fraud and cheating. He was sentenced to two and half years of probation. A state database shows he's living in Orlando, but, like Janjua, he couldn't be reached for comment.
One of the slot attendants, Paonessa, was also determined to have falsified his license application when he hid a petty theft conviction. So much for state background checks.
Janjua was ultimately convicted of petty theft for his role in the scheme and sentenced to probation. Most of the other employees named in the report were fired (though I understand one remains employed). Lemerand, the highest-ranking employee involved, was quickly suspended and later was allowed to resign in lieu of being fired. He was also barred from the property for a year.
Back in 2007, I spoke with Lemerand, who had moved to Michigan, and he denied involvement in the theft ring. The investigation, however, found that he was an associate of Janjua and had used cocaine supplied at an off-site party. Investigators wrote that Lemerand was "suspected of circumventing internal controls" on the gambling cards. Lemerand didn't respond to voice messages left last week at his Michigan home.
In the end, not a lot of punishment or blame has been meted out for a crime that stole at least $300,000 from a casino and ripped off tax dollars earmarked for education. Reviewing the state's investigative reports, it's clear that one reason is that the casino was so inept at regulating itself that it couldn't be determined who stole what. Either that or Gulfstream hindered the investigation. It was accused of a bit of both.
The state hired a Las Vegas firm, BMM Compliance, to try to pinpoint who was responsible for tampering with the cards. BMM owner John Goetz quickly determined that Gulfstream's internal auditing functions had been turned off in July 2007, about the time the theft of the cards began.
The shutting down of the auditing function made it impossible for investigators to determine which employees authorized the use of the cards to Janjua and others suspected to be involved in the scheme.
Goetz, in his investigative report, detailed how the casino should have prepared daily reports that used that auditing function. Since those reports weren't being done at the time, it went unnoticed. And the fraud flourished.
BMM also determined that there wasn't clear separation of duties by Gulfstream employees to ensure accountability and foster a clean operation. The fact that thousands of dollars in credits were loaded onto test cards should have been discovered quickly, Goetz wrote. And the winning tickets were also apparently mishandled.
"ALL test transactions should be documented so that proper accounting practices can be used to account for the money both being loaded onto the card and used at the slot machine," Goetz wrote in his report provided to state investigators. "All tickets should be properly documented and returned to the cage for proper revenue accounting. This clearly was not done at the property."
When BMM began requesting records from Gulfstream, it often didn't receive them. Goetz ultimately complained to state regulators that the casino was so slow in providing documents that it hindered his own investigation.
And investigators weren't given access to Gulfstream officials either. Just three weeks into the investigation, Gulfstream attorney Marc Dunbar put the kibosh on communication between the state and Gulfstream officials.
"Gulfstream continues to feel that they are on the same page with [state investigators] regarding the inquiry," Dunbar wrote in an October 22 letter to the state. "However, out of concern for the sensitive nature of the investigation and the need to ensure that confidentiality is maintained until its conclusion, it seems to make sense to create a communication funnel through counsel at this point."
Ah, nothing a criminal investigator enjoys more than a "communication funnel" through a lawyer while looking into a casino heist.
Dunbar refused to comment for this article, as did Gulfstream spokesman Mike Mullaney, who said he was under strict orders not to discuss the investigation. Dunbar's law firm did send New Times a written statement.
"Gulfstream Park was targeted by a ring of unscrupulous employees who engaged in activities," Dunbar wrote. "Gulfstream was the first to uncover the activity via its internal security processes and immediately reported the matter to state regulators... Gulfstream continues to cooperate fully with state officials and awaits the outcome of the investigation into the activities of these individuals."
Dunbar, according to sources, has a long and close relationship with Dave Roberts, who served as chief of the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering throughout the investigation. Roberts abruptly resigned his position with the state two weeks ago. The investigation, meanwhile, has yet to be closed by the state, which could still levy fines and other sanctions against Gulfstream.
More to the story? We'll see.
Get the Things to Do Newsletter
Find out about upcoming events and special offers happening in South Florida.