DATE: Thursday, November 20, 1997           TAG: 9711200462

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY JUNE ARNEY AND MATTHEW DOLAN, STAFF WRITERS 

                                            LENGTH:  106 lines

EMBEZZLEMENT ALLEGED AT HAMPTON BINGO HALL A CHARITY ESTIMATES $100,000 WAS DIVERTED.

The operator of a now-defunct Hampton bingo hall is being investigated for alleged embezzlement and illegal gambling that might have diverted more than $100,000 from bingo games by using a dummy charity, according to court papers filed this week.

The allegations raise new questions about the scope of illegal activity in charitable bingo operations across Hampton Roads. To date, no charges have been filed in the latest investigation.

The Virginia Charitable Gaming Commission executed a search warrant at home of Frank Bullock, on Old Church Circle in Portsmouth, last week. Bullock is listed as president of 4 LEAF Corporation, which operated as Buckroe Plaza Bingo Hall in Hampton.

That business recruited at least one legitimate nonprofit group in order to get a charitable gaming permit for bingo, according to the search warrant affidavit.

The legitimate group, The Coalition for Community Pride and Progress, began to complain that it wasn't getting its share of profits from bingo. The coalition suspected that the bingo business was skimming most of the profits, the affidavit said.

For more than a year, the court papers said, the community coalition received no income from instant bingo tickets being sold, although it was paying for them as part of supplies.

Viola Brown of Newport News, treasurer of the coalition, estimated that more than $100,000 was diverted from charity.

``They ran the bingo for us, but what they reported to us was nothing compared to what they were taking in,'' she said Wednesday.

The community coalition did civic work with a group called the Association for the Restoration of Historic Cemeteries, which keeps the grounds of area cemeteries groomed, she said. They also shared in the proceeds from the Monday and Wednesday night bingo sessions.

``I feel awful about it,'' she said. ``There was nothing we could do about it but close down. . . . We should have known better, but we didn't.''

Bullock, president of 4 LEAF Corporation, could not be reached at his home on Wednesday.

However, Leroy Sharpe of Portsmouth, listed as treasurer for 4 LEAF, said Wednesday that his group did not keep money that should have gone to charities.

``The coalition was saying that we were holding back money, but we gave every bingo group the money they were entitled to,'' Sharpe said. Although he was listed as treasurer, Sharpe said he did not manage the corporation's books.

Sharpe said he was interviewed Tuesday by an investigator from the state gaming commission at his Portsmouth upholstery shop.

John Cencich, special agent in charge of the enforcement branch of the gaming commission, said he could not discuss the case because it is a pending investigation.

Nothing was seized during the search of Bullock's home, according to the papers. Authorities were looking for books, ledgers, receipts, invoices or any other records or documents connected to gaming.

The search warrants filed in Portsmouth Circuit Court outline the following:

The 4 LEAF Corporation was chartered by the State Corporation Commission in April 1992. It obtained a business license in January 1993 from the city of Hampton to rent space to nonprofit organizations with permits to conduct bingo.

Under state law, only nonprofit organizations - including fraternal lodges, educational and religious groups - may have bingo games to raise money. The games cannot be run by a for-profit entity.

The 4 LEAF Corporation rented Buckroe Bingo Hall to three organizations: the community coalition, the cemeteries association and the O'JAYS Social Club.

The affidavit said that the board of officers for 4 LEAF and O'JAYS was essentially the same, and therefore prohibited by state law from operating bingo games. The O'JAYS was chiefly a front to conduct charitable gambling, according to information received by the commission and contained in the affidavit.

Sharpe said the O'JAYS was formed in the late 1970s as a social club that sponsored trips to Atlantic City. He said four members of the group put up money to lease the bingo building and hold games for charities.

He said he did not personally profit from his investment. ``I didn't get anything back . . . and I think the O'JAYS are bankrupt now,'' he said.

The court papers only briefly mention the cemetery organization and focus on the community coalition and the money allegedly diverted.

The 4 LEAF Corporation told the coalition that games would be conducted on their behalf without their involvement, according to the court papers.

The coalition alleges that between April 1993 and October 1994, it received about $700 a month in profit from the bingo games before taxes. After a compliance review by the city, profits increased to $7,500 a month between November 1994 and April 1995, based on banking records of total monthly deposits, the court papers say.

In April 1995, the coalition became aware that, under state law, it was supposed to be directly involved in the games. Once the coalition got involved, ``the complainant observed large amounts of cash being withheld by 4 LEAF Corporation personnel,'' according to the court papers.

After a confrontation with 4 LEAF members, the coalition received profits from the sales of instant bingo tickets. In May 1995, the coalition realized gross profits of $21,700 - an increase documented by banking records, the court papers said.

None of the groups any longer has a permit to conduct charitable gaming, according to the papers. ILLUSTRATION: Graphic

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[For complete graphic, please see microfilm] KEYWORDS: BINGO EMBEZZLEMENT FRAUD

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