THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Thursday, February 20, 1997 TAG: 9702200062
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY JUNE ARNEY AND MATTHEW DOLAN, STAFF WRITERS
DATELINE: CHESAPEAKE LENGTH: 127 lines
A top state gaming official said this week his agency is investigating the alleged embezzlement of as much as $1 million worth of instant gaming tickets by the former bingo manager of a youth baseball league.
George West, who managed the bingo operation for 3 1/2 years until he was dismissed last week, allegedly diverted funds from the Deep Creek Baseball Association to his own personal use through the sale of instant gaming tickets, according to search warrants and affidavits filed in several jurisdictions by the Virginia Charitable Gaming Commission.
At the end of its investigation, the commission could recommend criminal charges to the Chesapeake ommonwealth's attorney, according to Jerry W. Rowe, the commission's executive secretary, who confirmed the investigation on Tuesday.
West, a Portsmouth businessman, said Wednesday that he could not discuss the allegations against him. His lawyer did not return telephone calls.
Daniel B. Moore, president of the Deep Creek Baseball Association, said the organization began an investigation into the league bingo operation after an Internal Revenue Service audit showed discrepancies in accounting about nine months ago.
``I'm angry,'' Moore said Wednesday. ``That money could have been used to buy fields, better equipment, start more programs. We're financially in good shape, but we could have been in better shape.''
Baseball officials had hoped to build a baseball complex at an estimated cost of $1 million, Moore said. They wanted a permanent place for their approximately 600 members to play. Currently, they use city fields.
``We can't do that now. . . '' Moore said. ``We trusted people who said to us they wanted to help us help the kids.''
According to the search warrants filed this month, West allegedly bought ``large amounts'' of instant bingo tickets from a supplier and never recorded the purchases, as required by law.
The legal documents say the purchases were for more than $8,000. Those tickets could have been sold for an estimated $400,000, according to the affidavits. After reviewing the association's bingo records and seized tickets, authorities have raised their estimate to as much as $1 million, according to Rowe, the commission's executive secretary.
The commission seized 94 boxes of tickets containing instant bingo cards and other bingo supplies from a storage facility in Chesapeake, according to a search warrant filed by the commission's senior special agent, Charles E. Speigner.
Moore, the Deep Creek baseball president, said West took him aside on Feb. 6 and told him he needed to get out of bingo. That was the same day a warrant was issued to search a storage facility rented by West's son-in-law. Moore took the matter to the baseball organization's board of directors. On Feb. 10, they told West they didn't need his services any more, Moore said.
West described the investigation as ``harassment.'' He said it has convinced him to get out of volunteer fund raising.
``In the 3 1/2 years we've been there, we raised more than $350,000,'' he said.
West, a former youth league coach and umpire, said he was invited to take over the bingo operation by an officer with Deep Creek baseball. West said he currently runs the bingo operation for the Greenbrier Athletic Association, but plans to leave by June. In an interview Wednesday, Paul D. Vestal, president of the Greenbrier Athletic Association, said it is his understanding that West will leave within 30 days by mutual agreement.
The gaming tickets involved are similar to the instant bingo tickets sold by the Virginia Lottery. The tickets typically are sold for $1 apiece, and each box contains a predetermined number of winners and losers.
The tickets, also known as pull-tabs, can only be purchased before, during and after traditional bingo games.
A player purchases a ticket and pulls back each of its five tabs. Players usually know instantly whether they have won a cash prize by looking at symbols printed underneath the tabs. Sometimes there are special numbers on a ticket that make the player eligible for additional prizes.
Under the Gaming Commission's regulations, a charitable organization must keep an inventory for the number of instant tickets purchased, the number of tickets sold, the amount of money collected and prize money distributed.
Moore explained how someone could circumvent the system. Extra boxes of tickets could be bought from a supplier and then slipped into instant bingo games. A box typically contains 1,500 tickets and yields a profit of about $400 after prizes have been paid, Moore said.
Eight boxes might be sold in a night. If three boxes were mixed in with five sold for the baseball association, the profits for the person selling them could be $1,200 a night or $2,400 a week over the two nights of bingo, he estimated.
On Jan. 7, early in their investigation, authorities conducted surveillance and saw West put two briefcases in his car after he conducted gaming activities at Brentwood Hall at 1420 North George Washington Highway in Chesapeake, according to the affidavits. He took the briefcases out and brought them into the office of Victory Auto Sales at 2517 Victory Boulevard in Portsmouth. He is president/director of the dealership.
On Jan. 16, West was again seen leaving the gaming activities at Brentwood Hall and driving to his home in Virginia Beach, where he took items from the back seat and put them in a trash container, the affidavits said.
``This activity is also consistent with information received by the commission from an anonymous informant who stated that West discards empty boxes of instant gaming tickets in order to avoid detection of his fraudulent activities,'' one affidavit said.
On Jan. 24, officials found an empty ticket box in trash outside his home with the writing ``one set - 792121'' on the outside of the box.
The Gaming Commission's Rowe said four search warrants were issued by the commission in connection with the Deep Creek investigation. One was to search West's Virginia Beach home; one the Portsmouth auto dealership where he is president; one a storage locker in Chesapeake registered to his son-in-law; and another to search Frank Moran and Sons Inc., a bingo supplier in Baltimore.
Deep Creek Baseball Association Inc. reported $1,326,890 of gross receipts from its gaming operations for the 1996 fiscal year. Those revenues made Deep Creek the 14th most lucrative bingo operation in Southeastern Virginia, according to commission reports. The agency tracks 92 charitable organizations in the region that engage in bingo and earn more than $25,000 a year.
The General Assembly legalized bingo games by charitable organizations in 1973. Cities and counties regulated bingo operations until recently. But after several criminal investigations into alleged bingo corruption in the 1980s and 1990s, the General Assembly passed the Charitable Gaming Law and created the Charitable Gaming Commission to regulate all bingo operations. It began operating in July.
The Deep Creek investigation marks the first time the commission has issued search warrants for a bingo investigation, Rowe said.
``We have four or five other investigations going on around the state,'' Rowe said. ``But we've gone the farthest with this one.''
While the bingo operation continues, Deep Creek baseball officials say they plan to file lawsuits against those found responsible for the loss of funds.
``Our swords are drawn, and if you did something wrong to our league and our kids, you're not going to be spared,'' Moore said. ``We play baseball, and I guess the terminology is we're getting ready to play hardball.''
KEYWORDS: BINGO LITTLE LEAGUE BASEBALL CHESAPEAKE
EMBEZZLEMENT FRAUD