Rio faces new fine

Cy Ryan and David Strow

Monday, July 12, 1999 | 11:12 a.m.

The Rio Suite hotel-casino, which just paid a $25,000 fine to state gaming regulators, is now accused of violating accounting regulations during a poker tournament in January.

The Rio has 20 days to answer the complaint and ask for a hearing to contest the seven-count complaint that was lodged last week by the state Gaming Control Board.

The complaint, drafted by Deputy Attorney General Kimberly Maxson, said there is also "reasonable cause" for the state Gaming Commission to suspend, limit or revoke the license of the Rio for its allegedly "unsuitable method of operation."

Steve DuCharme, chairman of the Gaming Control Board, said that language is standard for all board complaints, and does not indicate that the board will actually try to suspend or revoke Rio's license. The Rio faces 13 separate charges, DuCharme said, each carrying a minimum fine of $25,000.

The maximum possible fine is $1.35 million.

"While these violations are not infrequent, we try to ... encourage companies to closely monitor this kind of activity," DuCharme said.

The Rio is owned by Harrah's Entertainment. Rio officials today declined comment on the allegations.

Board agents, acting on an anonymous telephone tip, visited the Rio Jan. 12 as it was holding a poker tournament with 55 tables. The complaint says they watched two cashiers, identified by the state as Anne Fitzgerald and Shirley Shelley, giving large sums of money to players in exchange for their chips without getting any identification and not recording the transactions.

Nevada gaming regulations require casinos to report each cash-out transaction of more than $10,000 to a player. Clubs are required to get the name, address, Social Security number and look at some document such as a driver's license to verify the information.

The complaint says agents observed one player redeem $29,197 in chips for cash from Fitzgerald, who did not obtain any identification from him. The complaint said board agents later reviewed surveillance videotapes that showed similar violations both by Fitzgerald and Shelley. And both cashiers also failed to record the transactions on the required form, as required by state rules, the state alleges.

"These are violations which we monitor very closely because of our agreement with the Treasury Department," DuCharme said. "While it is covered under money laundering regulations, we have not seen any intentional attempts to launder money. It is generally due to a lack of employee training."

The board is not accusing the Rio of money laundering activity, he said.

The complaint said other similar regulations were violated. And board agents found "multiple errors" in the recording of some information. For instance the wrong dates were placed on the documents.

When the agents interviewed Fitzgerald and Shelley, they found the two had received only cursory instructions in the state's cash transaction regulations. Fitzgerald worked only temporarily for the Rio from Jan. 11-14. She said she was given some papers, apparently about accounting regulations, but she never read them, the state said.

Shelley worked previously for the Rio in the coin vault and as a cashier. She said she was given accounting regulations and was told she would be tested later. She was never tested nor did she receive any training, the state alleged.

The complaint said this is in direct violation of the regulations that employees are to receive at least limited training before they are permitted to work in these type jobs.

Agents also found a discrepancy in the W-2G tax forms made out for the winners -- the amount awarded was $5,427 less than reported on the IRS form.

The complaint says tournament Coordinator Steve Morrow told the agents that the first place winner, Thor Hansen, had tipped the tournament dealers $5,427. Morrow said he had forgotten to include the amount on Hansen's W-2G form. He corrected the error once it was brought to his attention.

If agents had not caught the error, the complaint said there would have been an improper tax return filing, resulting in a violation of federal law. The gaming board said this also is a violation of state regulations.

Last month the Rio paid the $25,000 fine for allowing minors to play slot machines and loiter in the casino areas. The casino said it has a full-fledged program to keep those under 21 away from the gambling, including sweeps on every shift to make sure only adults are in the gaming area. And the casino said it provides extensive training to its new and veteran employees.