California’s former gambling enforcement chief has agreed to revocation of his licenses as a card room owner and consultant following his admission earlier this month to having solicited and received confidential investigatory information about his client, Casino M8trix in San Jose.
Robert Lytle, who resigned as director of the Attorney General’s Division of Gambling Control in 2007 to become a card room consultant and owner, also admitted failing to disclose violations of the Gambling Control Act.
Lytle agreed to pay at least $75,000 in fines and costs or 15 percent of the liquidation of his ownership in two Sacramento card rooms, whichever is higher.
Lytle was accused in a December 2014 accusation filed by Attorney General Kamala Harris with possibly compromising a skimming investigation of Casino M8trix, suspected of diverting $119 million in profits to shell companies to avoid taxes. The case against the casino resulted in the resignation of half-owner Eric Swallow, a fine of almost $500,000 and the sale of his interest in the casino.
Lytle also was accused in the accusation of violating state business and professions code prohibitions against working in the gaming industry or representing licensees within a year after leaving the regulatory agency.
“We did settle,” Jeffrey Kravitz, Lytle’s attorney, said of the May 2 hearing before Administrative Law Judge Jonathan Lew in Sacramento. “It [settlement agreement] has not yet been signed. But it’s basically been worked out.”
Lytle did not return a telephone call seeking comment.
The Lytle scandal directed a harsh light on the state’s regulatory system, particularly when it was disclosed Lytle issued an opinion letter days before his resignation that helped card rooms operate a version of house-banked card games attorneys for American Indian casinos contend are in violation of state law.
Meanwhile, Richard Lopes, former chairman of the California Gambling Control Commission, and Tina Littleton, the commission’s onetime executive director, recused themselves from involvement in the investigation; Lopes because of his friendship with Lytle and Littleton because of a live-in relationship with the bureau agent suspected of giving the confidential information to Lytle.
Lopes later retired from the commission and Littleton stepped down to assume a lesser role with the agency.
Lytle was director of the division before its duties were transferred to the AG’s Bureau of Gambling Control under a re-organization in 2013. The bureau serves as the state’s gambling enforcement and investigatory agency.
Lytle formed Lytle Consulting Services and went to work for Garden City Casino, which later became the parent company of M8trix, “on or about” December 31, 2007, the day after he resigned from the enforcement agency and at least a month after he began negotiating a consulting contract with the company, according to the AG’s accusation.
Before leaving the agency Lytle met with Garden City “with respect to outstanding notices of violation” filed against the company by state regulators and San Jose police, the accusation states.
Lytle directed the agency “to cut back ongoing investigatory activities regarding Garden City,” according to the accusation.
The accusation also states that between December 2012 and December 2013 Lytle “solicited and received confidential information” about Garden City and Casino M8trix from the bureau’s special agent in charge (SAC) during “no less than 180” telephone calls.
The two “also communicated by text and email,” the AG’s accusation said of Lytle and the SAC.
“Lytle’s receipt of such information and documents potentially compromised the effectiveness, and undermined the integrity, of the bureau’s investigations,” the bureau said in the accusation.
Deputy Attorney General Bill Torngren told the administrative law judge Lytle will provide ”limited admissions” to the allegations in Harris’ formal accusation.
“Those admissions will be, big picture-wise, that he solicited and received confidential information from bureau personnel and that he failed to disclose violations of the Gambling Control Act,” Torngren said, according to a hearing transcript.
Kravitz declined to elaborate.
