A former Wynn Las Vegas salon manager who helped spark the sexual harassment scandal that brought down Steve Wynn is suing Wynn Resorts CEO Matt Maddox and two former executives of the company, claiming they approved a “secret undercover operation” aimed at gathering derogatory information about him.
Jorgen Nielsen, who was the salon’s artistic director, is suing Maddox, former general counsel Kim Sinatra and a former security chief, James Stern, for invasion of privacy. The suit alleges they participated in a plan to send an “undercover operative” posing as a client to the salon at the Palms Casino Resort in Las Vegas, where he worked after resigning from the Wynn Salon.
The suit claims Nielsen was targeted because he provided information to the Wall Street Journal for an explosive January 2018 story that included testimony from several former female employees of the salon, all accusing Wynn of preying on them for sexual favors. Nielsen figured prominently in the story, speaking on the record to say “everybody was petrified” of Wynn’s behavior, but “nobody was there to help us.”
Wynn denied the accusations, but the story unleashed a barrage of claims from other reputed victims of the casino tycoon, forcing him to resign as chairman and CEO within days of its publication.
Wynn cut his ties with the company he founded by selling his sizable share last March. The scandal resulted in a purge of the board of directors and the resignation of several top executives, including Sinatra, who was said to be one of Wynn’s closest confidantes. In Nielsen’s action, she’s accused of covering up Wynn’s alleged wrongdoing by failing to tell the board and gaming regulators about secret settlements the boss paid to some of the women.
Evidence of an executive cover-up came to light in subsequent investigations by regulators in Nevada and Massachusetts, who have been harshly critical of Wynn Resorts for failing to respond to years of complaints from employees Wynn allegedly preyed on. The company was fined a combined $55 million by the two states, including a fine of $500,000 against Maddox in Massachusetts. Nevada’s Gaming Control Board is now seeking to ban Wynn from gaming in the state by having him declared “unsuitable” to hold a license.
Nielsen’s lawsuit, which is reported to have sprung directly from the Massachusetts investigation, identifies Stern as the likely mastermind of the undercover operation and claims Maddox and Sinatra approved it.
Given that the operative was sent to the Palms salon last March and Wynn sued Nielsen for defamation in April, Nielsen’s attorney, Kathleen England, said the timing is “especially troublesome.”
“This is maybe two months after Mr. Nielsen is the named source in a Wall Street Journal article, which has brought about this cascading series of investigations. It’s after Steve Wynn has divested himself of all his corporate positions and money interests. And they’re authorizing an undercover sting operation against a former employee. What could possibly be the legitimate purpose of that?”
Nielsen believes it was to further “Steve Wynn’s use of litigation, especially defamation lawsuits, to intimidate others from coming forward and telling the truth about his misconduct,” according to his complaint.
Wynn Resorts gave a statement to the Las Vegas Review-Journal denying his claims. “This lawsuit is without merit, and we will vigorously defend ourselves against it. As Matt Maddox clearly stated in his sworn testimony before the Massachusetts Gaming Commission, the company did not authorize any inappropriate surveillance activity.”
Sinatra’s attorney did not immediately respond, according to news reports.
