Attorney: Feds eyeing alleged use of tax returns by Mirage

David Strow

Thursday, Aug. 9, 2001 | 11:14 a.m.

Treasury Department officials are investigating allegations that an Internal Revenue Service employee secretly provided a gambler's federal tax returns to Las Vegas casino executives, a New York attorney said.

The investigation was first disclosed in a federal lawsuit filed Monday by Richard "Bo" Dietl, a New York private investigator, against the Mirage hotel-casino. In the lawsuit, Dietl claimed a third party had told him Mirage officials had paid an IRS employee for Dietl's 1995, 1996 and 1997 tax returns as part of a credit check. Moreover, the lawsuit claimed the Mirage was engaged in a "pattern of investigating and disclosing patrons' federal tax information."

This information alone wouldn't have been enough to trigger a lawsuit, said Dietl attorney Scott Balber. But shortly after Dietl was tipped off by the third party, Dietl was contacted by Treasury Department investigators, Balber said.

"When my client was contacted by this third party, he wasn't sure whether there was veracity (to the charges)," Balber said. "The assessment (of the information) was improved when he was contacted by Treasury Department investigators in the process of an investigation that had yielded similar allegations. Based on the (third party charges) alone, my client would not have pursued a lawsuit."

Dietl has been contacted by the investigators several times since April, and Balber said he's had conversations with Treasury investigators "on four, perhaps five occasions."

"Quite frankly, they're not forthcoming about details of their investigation, other than it was active and ongoing," Balber said. "We don't know how far this goes. We intend to do intensive discovery on the matter."

Named as co-defendants in the lawsuit were Thomas Sheer, former Mirage Resorts senior vice president of government relations, and Eugene Harding, a former investigator in the company's corporate security department. Both men left the company around the May 2000 merger between Mirage Resorts and MGM Grand Inc., said MGM MIRAGE spokesman Alan Feldman.

"The lawsuit we received was the first knowledge of anything alleged to have occurred in this case," Feldman said. "We're trying to investigate to see if any of this is true."

Bill Brunson, a spokesman with the IRS in Phoenix, said the agency could not confirm or deny any sort of investigation. Nor could the Treasury Department, said Treasury spokeswoman Tara Bradshaw.

Bobby Siller, a member of the Nevada Gaming Control Board, said the board hasn't been involved in any investigation with the Treasury Department, and was unaware of Dietl's allegations.

"Obviously this is of interest to us," Siller said. "As far as the board is concerned, we're not conducting any investigation. Obviously we'd be interested in following this, because it has to do with a licensee, but we're not conducting any joint investigation with the IRS or anyone else."

Siller said board agents will try to gather more information "about the credibility of the allegation." But he said simply the fact that Dietl had made the charges would probably prompt an IRS investigation, as tax returns are highly confidential. Siller is very familiar with federal investigations -- before joining the control board, Siller ran the FBI's Las Vegas field office.

"(Acquiring tax returns) would be committing an illegal act, and it would be a serious matter," Siller said. "The IRS is normally very protective of that information. They don't even share that information with other (government) agencies unless there's a grand jury subpoena or they're ordered to do so. Even if you're working on a joint criminal matter, they won't share it with you.

"Right now, it's just information in a lawsuit alleged by a third, unknown individual. There's a lot of footwork that has to be done to see if there's credibility to it."