Missouri gambling regulators subpoena Station Casino’s top executives

Tuesday, July 25, 2000 | 10:14 a.m.

The casino employees - seven high-ranking officials and a secretary - were ordered to appear as witnesses next month at a public hearing called by the Missouri Gaming Commission. The subpoenas were delivered by fax Friday in the investigation into the casino's former lawyer, Michael Lazaroff.

Jack Taylor, a Station spokesman in Las Vegas, said he could not discuss the development.

"As a matter of policy, we don't comment to the media on pending legal or regulatory issues, especially when they're matters that we understood to be confidential," Taylor said. In previous statements, the company has denied wrongdoing.

Lazaroff, a former partner at Thompson Coburn in St. Louis, represented Station Casinos when it got its gaming licenses for casinos in St. Charles and Kansas City.

He admitted in federal court last month that he hid from his law firm $500,000 in bonuses he received from the gambling company from 1994 to 1996. The money should have gone to the law firm before Lazaroff took his share - about $10,000.

The commission has made no public statement about the case other than to schedule the special hearing for Aug. 30 in Kansas City. That date was chosen because it falls two days after a state law takes effect that makes it a felony to lie to the commission.

This is only the second time commissioners have called such a hearing. The last such proceeding came in October 1996 and exposed questionable payments by Hilton Hotels Corp. to associates of a former public official in Kansas City. That controversy eventually forced Hilton to sell its Flamingo casino in Kansas City.

Station, based in Las Vegas, announced last week that it wants to sell its St. Charles and Kansas City casinos to a group of its executives. The company said it wanted to focus on its Nevada properties.

All but one of the subpoenaed Station employees work in Las Vegas. The exception is Troy Stremming, the company's Midwest general counsel, who is based in Kansas City.

The others who received subpoenas are: Frank J. Fertitta III, chairman and chief executive; Glenn C. Christenson, executive vice president and chief financial officer; Scott Nielson, executive vice president and general counsel; William W. Warner, vice president of finance; Richard Haskins, associate general counsel; John Pasqualotto, vice president of regulatory compliance; and Marnie Hinrichs, executive secretary to Nielson.

Two in that group - Stremming and Warner - are among the proposed investors in the spinoff of the St. Charles and Kansas City casinos.

More subpoenas may be issued, said Kevin Mullally, the commission's deputy director. Lazaroff is cooperating with the inquiry and will testify without being subpoenaed, Mullally said.

The hearing falls two days before Lazaroff is scheduled to be sentenced by U.S. District Judge Charles A. Shaw. Besides hiding the bonuses from his law firm, Lazaroff admitted inflating clients' bills and skirting a law that limits campaign contributions to candidates.

Specifically, he pleaded guilty to two counts of mail fraud and one count of causing false reports to be filed with the Federal Election Commission. Under federal guidelines, he could get a prison sentence of 27 to 33 months.

A court record said Lazaroff had agreed to cooperate with the Gaming Commission and federal prosecutors in Kansas City. As a result of his cooperation, Lazaroff could receive a lighter sentence - perhaps even probation.