State sues IQ Fund; seeks money for charities

Thursday, June 9, 2005 | 9:17 a.m.

BISMARCK, N.D. -- State officials are suing an organization called the IQ Fund, seeking to force it to turn over gambling money for charities.

The Gaming Division of the attorney general's office filed a lawsuit Monday in Bismarck against the fund, which operated Smoky's steakhouse and casino in West Fargo until it closed in October. The IQ Fund also surrendered its state gambling license in October.

"It's the first time we've ever gone after (a gambling organization), taken action against a board," said Keith Lauer, the state Gaming Division director for the past 13 years.

The state wants a judge to declare that the IQ Fund obtained its gambling license fraudulently, that it submitted false quarterly tax returns to the Gaming Division and that it violated or refused to comply with gambling laws. The lawsuit also seeks to force the IQ Fund to turn in at least $64,546 in net proceeds from gambling activity.

The attorney general would distribute that money to charities the IQ Fund had said would benefit from its gambling operation, the civil complaint says. The IQ Fund's stated corporate purpose is to "support education."