Las Vegas prosecutor happy to defend controversial law on casino markers

Grace Leong

Thursday, Dec. 2, 1999 | 10:59 a.m.

Clark County District Attorney Stewart Bell says Nevada's law on casino markers is a good one and he will be happy to defend the state's controversial practice of using bad check laws to prosecute gamblers with unpaid markers.

At issue in several pending lawsuits is whether a marker is a check or an extension of credit.

Bell, who maintains Nevada law equates dishonored markers with bad checks, is the subject of four class action suits filed against him and several of Nevada's biggest casinos by four gamblers from Texas, Maryland and California, who claim the defendants violated the federal Fair Debt Collection Practices Act by using Nevada's criminal enforcement provisions to collect private casino debts.

"The Nevada law is a good one and as long as the bad check law is in the books, we'll continue to prosecute it," Bell said. "We don't collect debts. We prosecute fraud. The plaintiffs wrote checks that bounced, which is totally different from debt. Their action is predicated on the intent to defraud. That's what bad check laws are about."

"If you go to a casino and write a check, they give you $10,000 in chips in exchange for a promise that your bank will give them cash for the check, but when it draws on the check and you don't have $10,000 in the bank, you've defrauded them," he said. "It's a crime to rip people off."

Chief Deputy District Attorney Daniel Ahlstrom agreed.

"Our position is that the Fair Debt Collection Practices Act has absolutely unequivocally nothing to do with criminal prosecution, because it's a civil act. It addresses civil collection of bad debts. At this stage in this state, it is a violation of criminal law to write checks without sufficient funds to cover them," he said.

But both the plaintiffs' Californian attorney Richard Fine and gaming law expert I. Nelson Rose from Whittier Law School in Costa Mesa, Calif., disputed this, arguing markers should be treated as lines of credit and should therefore be collected through civil suits.

"It is impossible for casinos to give credit for a check. If you are giving the casino a check, you are using your own money. The difference is with the marker, you have a line of credit. It's like using a credit card," Fine said.

Rose agreed. "The criminal justice system is not designed for debt enforcement. The civil court system, however, is for individual businesses, so the normal way to collect debt is through the civil system," he said.

Fine stressed the purpose of these class action suits isn't aimed at stopping the casinos and Nevada prosecutors from collecting gaming debts but rather to stop them from collecting debt by using the power of the state.

"You can't enforce gaming debts by putting people in prison," he said. "Debtors' prison or putting a person in jail for a civil debt was stopped in England a couple of hundred years ago and there's no reason why it should be coming back now."

"By criminalizing it, the DA becomes the debt collector with a badge and a gun," said Robert Langford, Fine's co-counsel in Las Vegas. "What we're challenging is for years these markers are casino credit, then a few years ago, the casinos lobbied the state Legislature to begin to allow them to call these unpaid markers 'bad checks."'

"Markers have been around as long as there is casino gambling. Only now the defendants have decided they are going to change the nature of that debt by calling it something different, that is, a bad check. Bad checks have never been the vernacular," Langford said.

At issue is also the gambler's perception of a marker. "As far as the gambler is concerned, he's just borrowing money -- not writing a bum check. The marker looks like a check but it does things that no check does. It is an indication of a debt. But the Nevada legislature never definitively called the marker a check," Rose said.

Then there's the problem of proving subjective intent, Rose said. "When a person writes these markers, did they have the intent to defraud the casino, to utter bad checks, ie. knowingly writing checks when you know you don't have money to cover it?" "Some markers in New Jersey have written on them, 'I swear I have the money in my bank account right now' so the gamblers knew what they were swearing. But even there, it could be a breach of contract and not a criminal act," Rose said. "So why is this a crime? It's because we want people to be able to trust checks and not have to worry whether the check is good or not."

Ahlstrom believes this is the first time gamblers have asked for class certification to litigate against the District Attorney's office on its use of criminal law to collect bad debts.

The four plaintiffs are Matthew H. Fleeger from Dallas, Diana Coury from Baltimore, and Manuel Osvaldo Nacrur and Peter Newgard from California.

They allege Bell illegally filed criminal complaints to prosecute civil debts, unlawfully issued and circulated arrest warrants in Nevada and other states and allegedly violated their rights to due process.

The plaintiffs also sued casinos in Las Vegas and Lake Tahoe including Caesars Palace, Caesars Tahoe, the Las Vegas Hilton and the MGM Grand in Las Vegas, as well as prosecutors in Douglas County.

The suits alleged the defendants -- whom the plaintiffs say aren't bonded, duly licensed collection agencies -- used taxpayer monies of other states to collect debts by arresting and imprisoning them in other states. In his suit, Fleeger said Nevada prosecutors also petitioned prosecutors for the counties of Dallas and Colin, Texas, to obtain a warrant for Fleeger's arrest for the felony bad check charges in Nevada. Fleeger was arrested, booked and jailed for two days in Dallas and one day in Colin, Texas, by Texas law enforcement officials.

At issue is Senate Bill 335, which gave legal status to any gaming credit instrument dated after June 1, 1983.

It was passed by the Legislature to arrest Nevada's falling gaming credit collection rate in the early 1980s, which affected the state's tax revenues and casino profits.

For the 12 months ended Sept 30, 1999, more than $8.6 billion in credit play was issued, the state Gaming Control Board estimates.

Casino tax revenues, which make up about 40 percent of state taxes, climbed to $637 million in 1998 from $584 million in 1997.

The Clark County District Attorney's Bad Check unit, which has 20 employees, was set up in October 1995, and bad check complaints from casinos make up about 5 percent of the total number of prosecutions the unit undertakes for insufficient funds or closed accounts, Bell said. He added the unit collected $8 million in restitution last year but doesn't have any figures on casino marker collections.

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