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TIFFANY BROWN / LAS VEGAS SUN File
Terrance K. Watanabe, 52, left, with his sister, Pam Watanabe-Gerdes, and lawyer, David Chesnoff, leaves the Regional Justice Center on May 20.
Friday, July 17, 2009 | 2 a.m.
Sun Archives
- Grand jury indicts high roller in $14.7M casino debt case (4-29-2009)
- High roller posts $1.5 million bail to avoid jail stay (2-18-2009)
- Philanthropist allegedly owes $14.7 million to Rio, Caesars (2-4-2009)
- Feds press probe of ex-Fry’s executive (2-2-2009)
- Casino profile details luxurious lifestyle of former Fry’s executive (1-14-2009)
- Feds looking into high roller’s debt payments (12-31-2008)
In the quarter-century since the Legislature passed a law allowing authorities to prosecute unpaid gambling markers as bad checks, no one charged with failing to pay back a casino has been able to persuade a court to overturn the oft-criticized law.
But a high rolling Nebraska philanthropist facing felony bad-check charges stemming from $14.7 million in gambling debts at Caesars Palace and the Rio is mounting a legal challenge that, if successful, could open the door for other gamblers with casino debts to also attack the law. Terrance K. Watanabe, whose wealth comes from the sale of a successful Omaha-based wholesale novelty company, has the resources to take his fight to the highest levels of the legal system if necessary.
His high-powered Las Vegas defense attorney, David Chesnoff, filed papers in District Court on Thursday seeking dismissal of the criminal charges on the grounds that Watanabe’s extensive dealings with the two Harrah’s Entertainment-owned casinos in 2006 and 2007 did not fall under the bad-check statute.
Chesnoff argued that his client had a written agreement with Harrah’s in which the company agreed to withhold collection of his markers for at least 60 days and thus, under the law, the transactions are not considered bad checks payable upon demand but rather loans that can’t be prosecuted.
“Such ‘checks’ are not negotiable instruments, and their nonpayment cannot be criminalized without violating the U.S. Constitution,” Chesnoff wrote.
This “unique” agreement “distinguishes Watanabe from virtually every other gambler in Las Vegas,” Chesnoff added.
He said a handbook put out by the district attorney’s own bad-check unit even states that the unit can’t prosecute cases where checks are predated or postdated or “where an agreement was made to hold the check for later payment.”
Steve Johnson, a professor at UNLV’s Boyd School of Law, said Chesnoff’s claims could have merit.
“This is an argument that can be advanced reasonably in court,” he said. “The case against Watanabe is not a slam dunk.”
If Chesnoff prevails, his argument could have ramifications in future cases, Johnson explained. Others facing criminal charges could claim to have oral agreements with the casinos and create uncertainty about the validity of the cases against them.
But Johnson added: “Just the mere making of this argument will make the casinos extremely reluctant to enter into such arrangements in the future.”
Criminal defense lawyers who have fought bad-check cases involving casino markers for years said they also believe that Chesnoff’s argument may have “legs” in court.
Thomas Pitaro and Robert Langford have long contended that gambling markers are extensions of credit and not subject to the bad-check law because gamblers are never asked to repay the debts right away.
“When someone gives you money, and you pay it back later, it’s a loan,” Pitaro said.
Added Langford: “Casinos call it credit until it’s not paid back. Then it becomes a check, and they turn to the district attorney’s office, which has become a collection agency with a badge and a gun.”
Chief Deputy District Attorney Bernie Zadrowski, who runs the bad-check unit, has defended the unit in the past, saying it merely carries out the will of the Legislature. But he could not be reached for comment Thursday on Chesnoff’s claims in the Watanabe case.
Harrah’s Entertainment spokesman Gary Thompson declined to comment on the written agreement, saying the company has a long-standing policy of not discussing legal matters.
The agreement was the result of the enormous amounts of money that Watanabe gambled at the company’s casinos, the court papers state. Harrah’s also provided Watanabe with one of its security officers to look after his needs while he gambled and, among other perks, provided him with his own roulette table in a private area, according to casino e-mails submitted with the motion to dismiss the case.
Chesnoff has indicated that Watanabe lost a total of $112 million at Harrah’s casinos in 2007 and that with the exception of the $14.7 million, all of that money was paid back to the casinos through wire transfers.
In his court papers, Chesnoff said his client’s prolific play, making him “Harrah’s No. 1 customer” and “one of the most noteworthy gamblers in the history of Las Vegas,” resulted in “revenues totaling hundreds of millions of dollars for various Las Vegas casinos.”
Watanabe’s play amounted to 20 percent of the revenues for Caesars Palace and the Rio in 2006 and 2007, the lawyer added.
Chesnoff also argued that the charges should be dismissed against Watanabe because Zadrowski failed to inform the indicting grand jury of the written agreement and did not present other evidence favorable to the 52-year-old Watanabe.
Chesnoff wrote a seven-page letter to Zadrowski before Watanabe’s indictment in April accusing Caesars Palace and the Rio of providing Watanabe with a steady flow of alcohol and — in the case of Caesars Palace — prescription painkillers as his losses increased.
Chesnoff contended that current and former casino employees would testify on Watanabe’s behalf that the resorts kept the high roller in a constant state of intoxication in the latter months of 2007 in violation of state gaming regulations. None of the witnesses was called to testify before the grand jury.
On Thursday, Chesnoff reiterated those allegations, saying in his court papers that Watanabe “could not have possibly had the capacity to validly enter into the marker transactions, nor could he have formed the required present intent to defraud at the time when the markers were signed.”
Jeff German is the sun’s senior investigative reporter.
here's part of your problem casinos, you take care of these jerks like royalty, and the hell with the masses. steve wynn really started this crap when he built the mirage, had his special room for high rollers, rest of us were supposed to marvel at the volcano and dump our money to pay for rich people. trouble is your running outta your whales and have forgotten how to be with the little guy and gal.
Casinos prey on gamblers and high rollers are no exception. Out of one side of their mouths they claim to support policies that address compulsive gambling, while setting up the high roller to take it all.
It isn't surprising to see all the defaults during tough economic times.
Don't think the rest of the whales aren't watching how big gamblers are being treated.
"Chesnoff has indicated that Watanabe lost a total of $112 million at Harrah's casinos in 2007 and that with the exception of the $14.7 million, all of that money was paid back to the casinos through wire transfers."
If this is true, then Watanabe paid the casinos $97.3 million....you would think the casinos would just write off the rest? I mean it's not like they got stiffed for the whole debt.
Calling a casino marker a "check" really strains credulity--it is credit. The only reason they can prosecute these cases as "bad checks" is because they have influence over the judicial branch, which comes from money.
he sure was a lousy gambler , wasnt he?
His father must be really proud of him
Seems obvious to me this man is a loser (at the tables)...does it take a rocket scientist to figure out this guy isn't winning any time soon. Who's the idiot here? the casino or this guy (who is still smiling by the way)
$112 Million lost.....in one year.
That is disgusting!
And...he certainly WAS a terrible gambler!!! But I guess when you have an unlimited amount of cash at your disposal, it's easy to accept the drinks and the drugs and keep losing....we all know gambling AND drinking to not go together. Throw in drugs, in you have a recipe for a mega disaster. If CHesnoff goes with the defense that the employees,by order from THEIR employer, kept Watanabe in a stupor, he may very well be successful in winning this case.
PS to my own post:
THere is also something called "personal responsibiity" on Watanabe's part so Chesnoff has to come up with some damn good argument on this point.
If he has the money to take this to the highest courts then maybe he should use that money to start paying off his markers. If he wins then others will follow trying to do the same...
Let's get real here. One of the founding principles expressed in the U.S. Constitution, is that unlike England of the 1700's, there are to be no debtors prisons in the United States. Of course, historically Nevada's Legislature has been so profoundly corrupt, in terms of doing exactly what the casino industry wants, the niceties of Federal Constitutional law, and its application to the states, state prosecutors and state courts by way of the 14th Amendment, goes completely unnoticed. As a matter of principle, these unconstitutional Nevada laws need to be litigated in Federal Court. I will be very surprised if the Ninth Circuit Court of Appeals, which is generally free of the corrupting influence of the casino industry, will put up with the Nevada Legislature's policy of imprisoning debtors.
I have no dog in this hunt. I won't waste a penny on a slot machine. I've simply taken an oath to preserve, protect and defend the Constitution from all enemies, foreign and domestic. I never understood that "domestic" part until recently.
The old adage from the 1700's, that no man's property or liberty is safe when the Legislature is in session is clearly appropriate even today.
this guy is probably a "personal responsibility" republican.
you lost pay up. what a joke. stop crying like a baby. at least daddy took good care of you with the money.
I didn't realize that the DA's policy says they can't prosecute cases where checks are predated or postdated or "where an agreement was made to hold the check for later payment."
I spent 15 years in casinos, and worked very closely with credit customers and dealt with a lot of credit related issues. That is exactly what they do! If a customer is approved for credit, they write checks to guarantee the loan. The understanding is that the customer will make good on the loan within 30 days, or the checks will be deposited.
I think a really good question would be, if the casinos didn't have their clients secure credit with a check, would they still be willing to risk extending credit? I think they would definitely weigh the decision with more scrutiny if they knew they would have to sue for non-payment .vs having the luxury of the DA prosecuting.
It sounds like this man and many others actually might have a case. If so, the casinos will need to spend their own resources to take these people to court for non-payment rather than using our DA's office.
LasVegas2009,
Have you ever thought that maybe the casinos have some responsibility NOT to get customers all boozed up, feed them downers, and then take advantage of their gambling addiction? To the tune of millions and millions of dollars?
Just a thought. Because THERE ARE LAWS AGAINST THAT TOO.
From this I see a mid-80s law that only now is being challenged -- all those lawyers and judges involved, and only now one well-paid lawyer has actually read the law for what it is. And the DA's office is suddenly coy about their cash cow being outed for what it is, a scam.
People, look at what we've allowed our courts to become -- justice is only for the rich. The rest of us are just meat for the grinder.
As for Watanabe blowing that mind-boggling amount in just one year, either it was his money to blow, or one must wonder why his father didn't preserve the fortune with a spendthrift trust.
The DA's office is a joke.. using their resources go to collect on casino debt under the disguise of a "bad check unit" -
I don't know about you.. but I can't even find a business that will accept a check without immediate verification and most banks encourage the use of debit cards. I think an audit is in order.
Using public resources to collect for casinos.. disgusting.
And for the rest of the David Roger dirt; I'll just leave that to Steve Miller.
We did have a great candidate for DA a few years ago.. just couldn't get the votes. Frank Cremen was the right man for the job then.. http://bit.ly/cremen
Maybe we can convince him to give it another shot.
And I don't care what Watanabe does with his money.. I only care what the County does with OURS -
BEAUTIFUL.
Post dated checks, checks held pursuant to agreement, etc. are NOTES and not checks. The "bad check statutes" do no not apply.
NICE.
That law stinks and watanabee should sponsor a ballot measure to get rid of it.
only go to Vegas one week a year..if I win I take it...if I loose I pay it. It's that simple. Whale or not the rules are the same. That's what my dad taught me and he would be proud. Wonder how Wantabee's dad would feel? Dad earned it..he lost it. Live up to it and accept your stupidity!
Hard to imagine losing over a hundred million dollars.
And after you've already lost over a hundred million dollars in one year alone, what's another fourteen million? Unless it's your last fourteen million.
Naturally the casino wants every penny they're owed and they probably don't have any '10% big loser discount,' but they might be better off settling out of court, for double or nothing.
And if he don't pay up they can just send their boys from the DA's office over for another visit.
Shame on the Casinos. This man, like a world class athlete played long and hard. Worked diligently at hauling cash from Nebraska and tried to choke the casinos with it (almost succeeded). He played through fatigue of 24 hour sessions, played hurt and took pain killers to get through the pain. He was their biggest player, a super star that dwarfed all others. Should get medals and accolades, be inducted into the loser's hall of fame and be toasted as the cash cow he is. Silly casinos, most of us can only dream of the insanity of someone working to earn millions and then get on a plane and deliver it to us for some smoke and mirrors.
Vegas should have an idiot tax.
I wonder if MGM/Mirage would welcome this guy to their tables? I don't doubt it.
qwill,
He could go in and play with cash, but they wouldn't extend him any credit or cash any checks for him.
My husband is a dealer..this guy played at his casino and was a very generous man. He isn't a bad guy. I kinda like the fact that he is fighting them... Gambling is ruining so many peoples lives..I hope people wise up and stop gambling. We can't wait to get out of this terrible town.
Even if there was some bad check clause removed on a alleged written agreement that pathetic gamblin fool signed with the credit department under these terms reported :
''in which the company agreed to withhold collection of his markers for at least 60 days and thus, under the law, the transactions are not considered bad checks payable upon demand but rather loans that can't be prosecuted''
Well the defendant certainly acknowledges the $112 million full debt amount ... and actually paid $97.3 million of the total markers and line of credit - which leads a remaining unpaid balance of $14.7 million US dollars....its been MORE than 550 days outstanding (18 months)
The defendant signed a promissary note stating he will pay the entire balance of all markers...There are 38 unpaid outstanding markers that total $14.7 million and he is trying to break that promise to pay, PERIOD !!.. and this is nothing new according to his player history...
He tried to stiff Green Valley Ranch in Nov. 2007 out of $1.2 million for markers he would not pay, once charges were filed he settled to pay $790,000 and Station Casinos agreed...
The Bellagio also forwarded charges for outstanding markers totalling $1.25 million...again, the defendant settled and paid an undisclosed amount.
I seriously doubt Harrahs will settle for less than the total amount that is due at this point.... and the cameras will show the defendant's condition with those markers he signed reference to the counterclaim for the alleged intoxicated and drugged state....if the defendant cannot prove this counterclaim, than he will be guilty as charged with defrauding the debt.
What a loser for having no control over his gambling issues.
Nevada is the only state to maintain debtors prison.
If a debt is owed, let the casinos pursue it through civil litigation, just like the rest of us.
The current practice is a corruption of state power and is corrosive to democracy.
Too bad this isn't the 50's or 60's. This guy would just disappear into 6 feet of desert. I would think just paying what he owes would be so much less of a hassle. He will never get credit in Nevada again.
It seems to me that Harrah's didn't pay attention to the Casino Creed: You can shear a sheep many times, but you can only skin it once.
This guy was a big bloated fat whale in sheep's clothing. A lamb for the continual slaughter. He was free money. Work with him, give him some time. He will give it all to you over the years.
Harrah's played this hand like a rookie at a poker final table. They deserve to lose this one.
I used to work for this man. He's a creep!! I'm sad to think that he might get away with this. He is a horrible person and deserves everything he gets.
wow i thought someone with that kind of money would at least have a slight clue on how to play cards. i say let him keep the 14.7 million for lessons im sure he'll be back soon after to blow more.p.s. how many millions do you have to blow before you realize you're not good at what you do??i'm also curious to know when does staff cut you off and realize you're a problem gambler 200 million????