Vol. 7 • No. 24 • June 29, 2009 - Print This Issue
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Vol. 7 • No. 24 • June 29, 2009, GOODS & SERVICES
GCA May Lose Arizona License
Regulators in Arizona are citing a fraud case involving Visa in recommending that Global Cash Access lose its license to do business with the state’s Indian casinos.
Gaming regulatory authorities in Arizona have issued a notice to Las Vegas-based Global Cash Access that the agency is considering pulling the vendor’s license to provide ATMs, credit checks and other cash-access services to the state’s Indian casinos.
The notice from the Arizona Department of Gaming alleges that separate scandals involving underpayment of commissions to banks and to casinos on cash transactions indicate that the company us not suitable under the department’s standards to be licensed as a vendor to Native American casinos.
According to the report, from 1999 to 2002, GCA deliberately miscoded transactions involving Visa by disguising cash transactions as retail purchases, meaning it would pay a lower fee to banks issuing the Visa cards. The vendor allegedly made $26 million on the purchases, and was fined $384,000 by Visa, but never returned any of the extra money it made on the transactions.
The report further points out that GCA deceived regulators in Michigan in 2004 and in Arizona in 2005 by hiding information concerning the miscoding scheme.
The report also cited “ongoing matters of concern” involving GCA, which included an investigation of the murder of the wife of one of the company’s founders, Karim Maskatiya, in which he and cofounder Robert Cucinotta were both questioned but gave inconsistent statements to the police and otherwise did not cooperate with the investigation. Both men later answered “no” when Arizona regulators asked if they had ever been questioned by a law enforcement agency.
Among other issues with GCA cited in the report were a failure by GCA executives to acknowledge any wrongdoing in the miscoding affair, and continuing problems with payments of fees to casinos and payments to casino patrons.
“GCA has committed a theft, fraud and concealment,” the report said. “It has conspired in these actions with (related company) USA Payment Systems. It has demonstrated a willful disregard for compliance with gaming regulatory authorities and has misrepresented and concealed material facts, documents and information in its dealings with the department and others.
“Casino vendors providing electronic fund access must be reputable, honest, diligent and effective. GCA has proven itself to be none of these.”
GCA intends to fight the action at hearings provided under Arizona law.
“The notice provides GCA with the right to an informal settlement conference as well as a formal hearing before an administrative law judge in Arizona,” the company said in a statement. “GCA intends to seek the holding of the informal settlement conference prior to July 15, and the holding of the formal hearing, if necessary, as soon as possible thereafter. In the meantime, absent further action by the department that prohibits GCA from doing so, GCA intends to continue its operations in Arizona in the ordinary course of business.
“GCA takes the notice and the allegations made therein very seriously. GCA believes that it has taken appropriate actions during the prior 20 months that will permit GCA to fully demonstrate that it should be considered suitable for certification by the department.”
The notice from the Arizona Department of Gaming alleges that separate scandals involving underpayment of commissions to banks and to casinos on cash transactions indicate that the company us not suitable under the department’s standards to be licensed as a vendor to Native American casinos.
According to the report, from 1999 to 2002, GCA deliberately miscoded transactions involving Visa by disguising cash transactions as retail purchases, meaning it would pay a lower fee to banks issuing the Visa cards. The vendor allegedly made $26 million on the purchases, and was fined $384,000 by Visa, but never returned any of the extra money it made on the transactions.
The report further points out that GCA deceived regulators in Michigan in 2004 and in Arizona in 2005 by hiding information concerning the miscoding scheme.
The report also cited “ongoing matters of concern” involving GCA, which included an investigation of the murder of the wife of one of the company’s founders, Karim Maskatiya, in which he and cofounder Robert Cucinotta were both questioned but gave inconsistent statements to the police and otherwise did not cooperate with the investigation. Both men later answered “no” when Arizona regulators asked if they had ever been questioned by a law enforcement agency.
Among other issues with GCA cited in the report were a failure by GCA executives to acknowledge any wrongdoing in the miscoding affair, and continuing problems with payments of fees to casinos and payments to casino patrons.
“GCA has committed a theft, fraud and concealment,” the report said. “It has conspired in these actions with (related company) USA Payment Systems. It has demonstrated a willful disregard for compliance with gaming regulatory authorities and has misrepresented and concealed material facts, documents and information in its dealings with the department and others.
“Casino vendors providing electronic fund access must be reputable, honest, diligent and effective. GCA has proven itself to be none of these.”
GCA intends to fight the action at hearings provided under Arizona law.
“The notice provides GCA with the right to an informal settlement conference as well as a formal hearing before an administrative law judge in Arizona,” the company said in a statement. “GCA intends to seek the holding of the informal settlement conference prior to July 15, and the holding of the formal hearing, if necessary, as soon as possible thereafter. In the meantime, absent further action by the department that prohibits GCA from doing so, GCA intends to continue its operations in Arizona in the ordinary course of business.
“GCA takes the notice and the allegations made therein very seriously. GCA believes that it has taken appropriate actions during the prior 20 months that will permit GCA to fully demonstrate that it should be considered suitable for certification by the department.”
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