The trial of three men accused by federal prosecutors of attempting to defraud Wynn Resorts and the state of Massachusetts about the secret involvement of a known racketeer and convicted felon in a purchase of land intended for a mega casino resort continued last week.
This week three top executives of Wynn were expected to testify about what Wynn Resorts knew and when did Wynn know it concerning the participation of felon Charles Lightbody in the land deal that eventually became the site of what Wynn hopes will be the Wynn Boston Harbor casino.
The first week of the trial of Dustin DeNunzio, Anthony Gattineri and Charles Lightbody concluded with the prosecution creating a roadmap of the fraud for jurors, a roadmap filled with excruciating details from emails, phone calls and documents.
If convicted, the three face up to 20 years in prison.
The “map” seeks to show that the three men colluded to hide the ownership of Lightbody in 35 acres in Everett that Wynn Resorts had optioned to buy from FBT Everett Realty group for what is now called the Wynn Boston Harbor. The men are accused of using promissory notes to hide Lightbody’s ownership.
Not everyone is convinced by the prosecution’s case so far. Walter Pavlo at Forbes wrote last week “If these three were part of a true criminal conspiracy, it would seem that they would have attempted to cover up Lightbody’s ownership from the beginning … make it as though he was never even a partner. They could have done this by altering ownership documents, paying Lightbody off in cash, giving Lightbody another parcel of land … you know, really enter into some sort of subterfuge. However, these defendants did what no criminal would do, they called their business attorney, Paul Feldman, and had him draft up documents to buy out Lightbody. No documents destroyed, no liquid whiteout to change dates, no obstruction of justice of any kind … just a legitimate note to buyout a partner whose presence on the deal would have meant its demise. Many would call that prudent business.”
So far witnesses have included Daniel Gaquin, of the law firm Mintz Levin, whom Wynn hired to handle the talks with FBT Everett Realty group on the purchase. He never asked who the owners were. While this was going on FBT was working to get Lightbody to sell his interest in the land.
On December 2012 Gaquin, FBT and its attorney finalized a letter of intent that gave Wynn an option on the property for $100,000 a month for a price of $75 million.
The prosecution has made a great deal out of a recorded conversation between Lightbody and a prison inmate Darin Bufalino in which Lightbody refers to “my situation,” and, says prosecutors, alludes to the need to hide his ownership.
During that prison conversation a recorded message plays a warning to inmates that their conversations may be recorded.
Pavlo writes, “The purpose of playing the call, besides the obvious guilty bias it could offer a jury, was to portray it as part of the conspiracy to hide the fact that Lightbody had concealed his ownership in the property.”
Massachusetts Gaming Commissioner Gayle Cameron also testified about her concerns with the calls, which came to light when the commission was considering Wynn’s application for the license for the Boston metro casino zone.
Cameron said, “I was absolutely concerned about the association with organized crime. The other issue that was of great concern was what the principals of Wynn knew.”
James Michael Flood, who worked for the FBT real estate group at the time of the sale told jurors that for several months beginning in late 2012 that he believed that his company was no longer associated with Lightbody. But then in June 2013 he heard the company’s partners discussing Lightbody and how they and Lightbody could reinvest their profits to avoid paying taxes on them.
Flood testified, “I remember thinking it was strange his name came up, because it was my understanding he was out of the deal.” His testimony was included to emphasize the prosecution’s point that Gattineri and DeNunzio took pains to hide Lightbody’s financial interest in the group.
If the commission had known about Lightbody’s ownership it would not have granted the license, said the prosecution, since state law forbids felons from profiting from a casino. That the partners hid Lightbody’s participation constituted fraud, they said.
The defense argues that the defendants say Lightbody had already agreed to transfer his ownership to them in 2012, before Wynn’s interest in the land became known.
Flood, who was for a time the only employee of the real estate group, was recruited by the FBI during their investigation and recorded a July 2013 phone conversation with DeNunzio in which Flood was urged to make sure that Lightbody and Gattineri sign paperwork. This is the paperwork that prosecutors allege was backdated to make it appear as though Lightbody sold his interest earlier than he did. Flood also wore a wire for the FBI for some of his conversations with DeNunzio.
During one such conversation DeNunzio told Flood, “Our friends from the Gaming Commission are climbing down our throat.”
Under cross-examination by the defense Flood also testified that DeNunzio told two top Wynn executives in November 2012 that the group’s ties with Lightbody were being severed.
On November 2012 Wynn executives Matthew Maddox and Kim Sinatra, the president and legal counsel for Wynn Resorts, visited with DeNunzio, who revealed that a man with “a checkered past” was part of the real estate group.
Defense attorney Joshua Levy asked Flood, “So DeNunzio told them about Charles Lightbody?”
“Yes,” said the witness, who when asked if they expressed any concerns, said that they didn’t.
This highlights a defense argument that Wynn’s organization knew about Lightbody’s possible involvement, which would mean that Wynn was not an unwitting victim.
The defense narrative is that Wynn executives were aware that the commission would oppose a land deal involving an ex-con, since it violated state law, and so Lightbody subsequently transferred his share of the property to Gattineri before Wynn signed the option in December 2012.
It also contradicts claims by the Wynn organization that it didn’t learn about Lightbody’s involvement until investigators for the gaming commission told them about it in mid-2013.
The top Wynn executives expected to testify this week include Maddox, Sinatra and James Stern, a retired FBI agent who is now serves as Wynn’s senior vice president of corporate security.
