Binion under microscope by Louisiana regulators

Guy Coates

Tuesday, May 14, 2002 | 11:01 a.m.

BATON ROUGE, La. -- Horseshoe Riverboat Casino owner Jack Binion -- of Las Vegas' legendary Binion gambling family -- entered into multimillion-dollar arrangements with his limited partners that could potentially lead to misconduct, a legal consultant told the state gambling board Monday.

At stake is Binion's license, up for five-year renewal, to continue operating the most lucrative casino in the Shreveport-Bossier market.

Ray Lamonica, a special assistant attorney general, gave his report on Binion's dealings to the board after an investigation that goes back more than a year.

Since the board operates much like a court, Lamonica said he did not want to expand. "The facts in the report speak for themselves."

The report never mentioned any illegal activity. It tracked Binion's dealings with limited partners that he paid great deals of money and then entered agreements with to buy out their interests.

The oral deals "reflect extraordinary and inappropriate business practices, not consistent with the high standards of conduct required of a licensee, and create the opportunity for and the appearance of impropriety, in addition to enhancing the potential for misconduct," the report said.

Lamonica reminded the board that it has alternatives ranging from renewing the license to denying renewal or "anything in between."

Horseshoe can request a hearing and probably will, said Lamonica. The bureaucratic process could take months.

Dominick Polizzotto of Tinsley Park, Ill., attorney for Horseshoe principals, told reporters later he had no comment. "We haven't read the report," he said.

The report listed the limited partners as Cassandra and Wendell Piper of Shreveport and August Robin of New Orleans. The report said there is no documentation of what they did to become partners or any business activity as partners.

An original limited partner, Frank Pernici of Shreveport, was bought out in 1995 for $6 million, the report said.

The Pipers, as a group, and Robin, entered into a buyout agreement with Binion in 1999, the group and Robin each receiving more than $18 million, said the report. They get more if half or more of the Horseshoe Companies are sold before 2004 for more than $535 million.

The limited partners each had less than 5 percent of casino ownership. Under Louisiana law, anyone with more than 5 percent is subjected to suitability investigations by state police.

Originally, Robert Piper Jr. was a limited partner but turned over his interest to his wife and brother, said the report.

None of the transactions were made in writing, Lamonica told reporters later.

The report also said Cassandra Piper and the daughter of Robert Piper were officers in a food distribution company that had no warehouse space, trucks, equipment or "even its own separate mailing address" but indirectly supplied food to the casino.

Last year the gambling board quizzed Binion about using "pass-through" companies to make it appear Horseshoe was doing business with minority vendors. The Pipers are black.

Binion said the problem had been corrected.