CHARLES LIGHTBODY AND DARIN BUFALIONO were grumbling in late 2012 about how wise guys are always discriminated against. Lightbody said it was unfair that people like him, a convicted felon, couldn’t be part of an Everett land deal with Las Vegas casino operator Wynn Resorts.
Yeah, said Bufalino, an associate of organized crime who was serving time at a state prison in Shirley. He singled out the “cock-knockers” at the Massachusetts Gaming Commission, and especially that “chick” from New Jersey on the commission.
In that colorful telephone exchange, captured on tape, Lightbody and Bufalino summed up prevailing wisdom at the time. They thought the Massachusetts Gaming Commission, and particularly its lone female commissioner, Gayle Cameron, were so determined to keep criminal elements out of the gambling industry that they wouldn’t allow a casino operator to buy land from a company partly owned by a convicted felon.
But Lightbody, who is facing wire fraud charges in federal court in Boston along with his codefendants, Dustin DeNunzio and Anthony Gattineri, may have had it wrong. Several prosecution witnesses on Thursday and Wednesday testified that the state gaming law contains no prohibition on a convicted felon selling land to a casino operator.
Prosecutors in their indictment say the Gaming Commission would not have awarded a casino license to Wynn Resorts if it was known that Lightbody would profit from the award. That’s why the defendants backdated documents and lied to investigators, prosecutors say. But lawyers for the three defendants say the facts don’t support that view. They say their clients’ actions were fueled by ignorance of the law and general ineptness.
In the process of making their case, the defense lawyers are also raising questions about the competence of officials at Wynn Resorts and its powerhouse Boston law firm, Mintz Levin Cohn Ferris Glovsky and Popeo. How is it possible, the lawyers keep asking in court, that one of the most respected casino operators in the world and one of the biggest law firms in Boston neglected to find out who owned the land in Everett that Wynn was buying?
Daniel Gaquin, a real estate attorney at Mintz Levin who works for Wynn Resorts, took the stand on Thursday and said he never asked who owned the land. The land was held by an LLC, or limited liability corporation, called FBT Everett; DeNunzio was the front man for the LLC and the firm was represented legally by Paul Feldman.
Feldman and Gaquin negotiated an option agreement on Dec. 19, 2012, that required Wynn Resorts to pay FBT $100,000 a month until the casino operator purchased the land for $75 million. The option agreement contained a boilerplate suitability clause that basically said Wynn Resorts could cancel the deal at any time if regulators had a problem with anyone associated with FBT.
Gaquin testified that he never asked during the negotiations over the option agreement about the owners of FBT. When he learned in late 2012 that a former shareholder in FBT had a criminal record, Gaquin said he didn’t think that was a “significant issue” and didn’t bother to ask about the current owners.
In his opening statement at the trial, Joshua Levy, the attorney for DeNunzio, said Gaquin was told by Feldman about Lightbody’s involvement in FBT. Levy even quoted Gaquin as saying “thank you, thanks for letting me know.”
But Gaquin on Thursday refused to confirm that story. Levy pressed him on his conversations with Feldman, but Gaquin repeatedly said he couldn’t recall being told about Lightbody or the other owners of FBT. At the same time, he refused to say he wasn’t told. “It’s possible,” he said, when asked whether Feldman might have told him about Lightbody.
Cameron, a commissioner at the Massachusetts Gaming Commission, said she was concerned about the integrity of the casino licensing process when she learned about Lightbody’s hidden involvement in the land deal and his conversations with Bufalino. A former state police veteran in New Jersey with special expertise in casino and organized crime, Cameron acknowledged there is nothing specific in the Massachusetts gaming law that prevents a convicted felon from selling land to a casino operator. But she said Lightbody’s involvement was troubling and needed to be fully investigated.
Cameron said the issue was eventually resolved when Wynn Resorts eliminated the “casino premium” on the land deal, which lowered the sale price from $75 million to $35 million. In theory, the lower price meant FBT wouldn’t profit from the casino license. Cameron said the commission also required the owners of FBT to affirm they were the only ones profiting from the deal and referred the case to law enforcement officials.
Lawyers for the defendants on Thursday also grilled Cameron about how the Gaming Commission handled other situations where someone with a criminal background was associated with a casino license applicant. They brought up two instances involving MGM Resorts, which won a license to operate a casino in Springfield. One situation dealt with a former board member of MGM called Terry Christensen, who was convicted of illegally tapping a phone in 2008 but continued to serve as a consultant to the casino company. The other involved another MGM board member named Anthony Mandekic, who in one interview with Gaming Commission investigators falsely claimed he had no recollection of the Christensen matter. The lawyers also raised issues about Wynn Resorts’ dealings with companies affiliated with organized crime in China.
In each case, Cameron said, the issues were investigated and discussed by the Gaming Commission. Ultimately, she said, the commission decided the allegations did not warrant withholding a casino license from either MGM or Wynn Resorts.
One situation the lawyers did not bring up was the Gaming Commission’s decision to raise four concerns about the suitability of Caesars Entertainment to run a proposed casino at Suffolk Downs. One of those concerns was a company licensing and marketing deal with the Gansevoort Hotel Group of New York. Gansevoort, the Gaming Commission said, had an investor with alleged ties to Russian organized crime. Caesars eventually withdrew from the Suffolk project and was replaced by Mohegan Sun, which eventually lost out to Wynn Resorts in the competition for the Greater Boston casino license.