Gaming Board approves Nigro to run Maxim in Vegas — files complaint against owner

Thursday, Dec. 18, 1997 | 10:54 a.m.

CARSON CITY -- Veteran gambling executive Ed Nigro won preliminary approval from the state Gaming Commission Wednesday to run the financially troubled Maxim hotel-casino just off the Las Vegas Strip.

And immediately after the meeting, the board filed a complaint against Maxim owner John Anderson, accusing him of violating state regulations by siphoning off more than $1 million in cash and stock from the resort, which is part of a tangled bankruptcy case.

The complaint asks that Anderson or the Maxim be fined up to $250,000 for each violation and that the license of the casino be either conditioned, suspended or revoked.

The board said the Maxim violated its ruling of earlier this year limiting the Maxim from paying Anderson more than $200,000 per year. Anderson will have 20 days to file an answer and ask for a hearing.

U.S. District Judge Phillip Pro on Tuesday ordered Anderson to return the $580,000 in cash, the stocks and the properties he had taken from the Maxim. Attorneys for the Federal Deposit Insurance Corp. claimed Anderson was trying to conceal the money and stock from his creditors.

The cash was returned to the casino on Wednesday.

During the board hearing, Anderson, who owns extensive farming property in the Sacramento, Calif., area, sat in the back of the room. But he declined to comment to reporters.

Nigro, a former part-owner of the Silver Nugget in North Las Vegas who was also involved in the Aladdin and Four Queens, will have 90 days to evaluate what should be done with the resort.

Final approval of Nigro's application is expected today at a meeting of the state Gaming Commission.

Nigro was chosen to be the receiver for $35,000 a month by West Coast Mortgage Limited Partnership, which holds the first deed of trust and is owed close to $41 million. The hotel has about 920 employees and Nigro said it will take him 30 days to assess the current operations.

He said he had no intention of making changes except he was prepared to bring in a new chief financial officer and a human resources officer. Nigro said he was concerned about the removal of funds by Anderson from the property.

Special Master Larry Bertsch, who has been managing the Maxim for the bankruptcy court, said the $580,000 in cash has been returned. And he said, "With the return of the capital and looking through to March, it can hold its own."

The Federal Deposit Insurance Corp. is also owed more than $80 million by Anderson involving many of his business dealings. The FDIC took over a failed savings and loan association that had loaned the money.

A shareholders' meeting for the Maxim is set for Friday and Anderson is expected to be replaced as president and an officer in the corporation.

But FDIC attorney Jim Giudici said there was no intention to close the casino.

Nigro's job will be to evaluate whether the casino should be sold or if it can be continued to be operated in hopes of paying off some of the creditors.

Anderson bought the Maxim in 1981 for about $60 million and he also owns the Station House casino in Tonopah, which is being operated by a bankruptcy supervisor. Nigro will not be involved in the Tonopah business.

Nigro was questioned by board members about his business dealings with Clark County Commissioner Yvonne Atkinson Gates and their partnership that wanted to start a frozen daiquiri business at several hotel-casinos, most notably the MGM Grand

Nigro said Gates, a long-time friend, came to him with the idea for the business and he was the one who sought leases with the MGM. He said Gates told him the Clark County District Attorney's Office had cleared her getting involved in the business and that she would seek a further opinion from the state Ethics Commission -- which is now investigating Gates's disclosures.

In trying to negotiate leases with Strip hotels and other properties, Nigro said he kept Gates informed but she was not involved in the dealings. When Gates pulled out of the company due to a controversy over conflict of interest allegations, Nigro said he refunded her $500 investment in the enterprise.

Nigro has given an affidavit on his business dealings with Gates to the state Ethics Commission, which will hold another hearing on the case Jan. 22 in Las Vegas.

Nigro also said Gates, sitting as a county commissioner, made a motion to approve a county lease for juvenile services of a building that was 25 percent owned by him and in which he was the managing partner. But he said Gates never knew about it.