Saturday, April 6, 1996 | 11:59 a.m.
IT was not a good week for Binion's Horseshoe Club and its embattled suspended executive, Ted Binion.
For Ted, the week brought a precedent-setting Nevada Supreme Court decision that backed up the scientific validity of hair testing for drugs.
That's important because Binion has been challenging the credibility of hair tests while trying to prove to gaming regulators that he's been drug free the past nine years, even though he has failed three exams in recent months.
Also last week, Nevada Gaming Commission Chairman Bill Curran dealt Binion a blow in his battle with the State Gaming Control Board.
Curran, despite objections from Binion's lawyers, ruled that the Control Board can take his deposition Tuesday under the watchful eye of the public. An interview Binion gave me last week apparently was instrumental in swaying Curran's decision to keep the deposition open.
The Control Board is investigating allegations Binion violated a September 1994 stipulation in which he surrendered his license and agreed to stay away from drugs for the past 18 months.
In last week's interview, Binion insisted he hasn't done drugs since his 1987 heroin conviction. He disputed the reliability of the three drug tests he took that showed traces of marijuana and cocaine. He even provided me with some scholarly research he uncovered that frowns on hair tests.
But the Supreme Court shot down his argument in a flash.
Its decision came out of the case of former San Remo hotel-casino employee Cynthia Holmes, who was fired in 1993 after a hair test came up positive for cocaine.
The high court reversed an earlier ruling by District Judge Gerard Bongiovanni, who had found that hair tests were unreliable.
For Binion, fighting to keep his livelihood in the casino industry, the timing of the Supreme Court decision couldn't have been worse.
It's likely to help the Control Board firm up its case before the Gaming Commission that Binion has indeed continued to use drugs since signing the 1994 stipulation.
Even more startling was the discovery last week that one of Binion's lawyers, Mark Ferrario, who's been helping him fight the drug accusations, had sided with San Remo attorneys supporting the credibility of hair testing in the Holmes case.
Ferrario, it turns out, filed a friend of the court brief on behalf of the Las Vegas Chamber of Commerce and the MGM Grand hotel-casino attacking Bongiovanni's decision.
In that brief, Ferrario concludes:
"If employers in this state are to be successful in combatting illegal drug use by job applicants and employees, such employers must be permitted to use the most effective weapons available to detect illegal drug use ...
"Hair testing for drugs of abuse has been well recognized by the courts, administrative agencies and the scientific community as being valid and highly effective for detecting illegal drug use ... in many cases five to 10 times more effective than urine testing."
That kind of argument isn't exactly what Binion was looking for when he hired Ferrario to help him discredit the hair-testing procedures outlined in his 1994 stipulation with the Control Board.
But the bad news continued.
While the lawyers were arguing last week whether Binion's deposition should be conducted in public, the Control Board's Enforcement Division stepped up its probe into allegations Binion has continued to wield influence at the Horseshoe during his suspension.
Agents resumed an investigative hearing on the subject behind closed doors, subpoenaing more Horseshoe employees to testify. The hearing is being used to bolster the board's case against Binion.
At the Horseshoe, meanwhile, the week wasn't much better.
The tax-evasion indictment of gambler Richard "The Fixer" Perry and his family caught the attention of the Control Board.
Agents began looking at whether a series of transactions by Perry's brother, Alan Perry, at the Horseshoe violated state cash reporting regulations aimed at thwarting money laundering.
The indictment alleges Alan Perry had deposited a $270,948 check into a Horseshoe account on April 1, 1992, and later that day removed $70,948 in cash. The money reportedly was from the sale of the Las Vegas home of Richard Perry, who's listed in Nevada's Black Book of "undesirables" banned from casinos.
A week after the check was deposited at the Horseshoe, the indictment alleges, Alan Perry removed the remaining $200,000, but took the majority, $190,000, in gaming chips rather than cash.
The Horseshoe, you'll recall, has been fined large sums of money in the past for violating cash reporting rules.
By week's end, the news got even worse downtown.
The Control Board filed a complaint against the Horseshoe for not being cooperative in an investigation last August into a New York-based bookmaking ring, dubbed the "Kosher Boys."
The Horseshoe allegedly allowed a key unindicted figure in the probe, Las Vegas oddsmaker Jack Franzi, to remove $54,961 from a telephone betting account gaming agents wanted to freeze.
The account, belonging to Franzi's son, Zach, was among several within the casino industry that agents were attempting to shut down, as part of a raid on the Kosher Boys.
According to the complaint, Franzi was allowed to empty his son's account, in violation of state gaming regulations, even though the Control Board had informed the Horseshoe it wanted to freeze the $54,961.
Franzi allegedly gained access to the money "upon the express authorization" of Horseshoe President Jack Binion, Ted's older brother.
Included in the account, the complaint charges, was about $20,000 in gaming chips belonging to a Kosher Boys ring member later indicted on criminal charges in New York.
And as if the Horseshoe hasn't had enough trouble dealing with Ted Binion's presence, the Control Board in the wake of the complaint sought last week to place an agent at the casino's sports book for the next six months.
Agents apparently feel they need to keep a closer eye on the sports book's wild goings on.
A week from hell for Ted Binion and the Horseshoe? You bet it was.
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