No gambling license for Ilitch casino partner

Casino syndicator Michael J. Malik, Sr., identified as one of those who originally backed Detroit's MotorCity Casino (Detroit Entertainment, LLC), was disqualified from receiving a gaming license by the Michigan Gaming Control Board (MGCB) in 1999 and forced to relinquish his interests in MotorCity Casino prior to the gaming hall opening its doors to the public.

News reports at the time suggest Michael Malik sold or transferred any interest to Mrs. Marian Ilitch, now the sole owner of MotorCity Casino. Any such details have never been made public. Since then, Malik has shared office space with Ilitch among the executive suite of offices at Ilitch Holdings, Inc. and the pair have partnered on various other casino proposals in Michigan and throughout the U.S.

Records used by the MGCB to determine qualifications have been sealed and deliberations over licensing have been kept confidential so it's unclear exactly why the MGCB declined to license Malik. Records and deliberations regarding ownerships transfers are also sealed and confidential. However, the following MGCB licensing guidelines have been published:

"The gaming board [MGCB] does not license an applicant convicted of any felony; a misdemeanor involving gambling, theft, dishonesty or fraud; or those who are 'unsuitable' due to questions of 'integrity, moral character or reputation.' "

Three investors must sell their Detroit casino interests - gamblingmagazine.com 04.25.99

Investors have troubled histories - las vegas review journal 04.27.99

Investor served probation for domestic assault on 12 year old boy - detnews.com 04.25.99

MGCB approves license for Greektown's Gatzaros

10.22.07

Gatzaros awarded a 1 percent stake in Greektown Casino

Joel J. Smith / The Detroit News

DETROIT -- After nearly 10 years of investigating Greektown businessman Ted Gatzaros, the Michigan Gaming Control Board today awarded him partial ownership in a Detroit casino.

By a unanimous vote, the board approved Gatzaros' application to become a 1 percent owner in Greektown Casino. Before the vote, board members said they could find no reason to reject the request.

Gatzaros left the board meeting smiling but declined to comment.

Gatzaros and his partner Jim Pappas were instrumental in pushing casino gambling in Detroit in the 1990s. After voters approved casino gambling in a statewide referendum, Detroit awarded the pair one of three casino licenses.

Following an investigation, however, the Gaming Board indicated a license to the pair would not be approved. Gatzaros and Pappas ultimately ended up selling their interest to the Sault Ste Marie Tribe of Chippewa Indians.

Under that sale agreement, the Tribe promised to sell a 4 percent interest in the casino and split the money between Gatzaros and Pappas. However, the agreement did not include a timetable for the sale.

With the board's decision today, Gatzaros has agreed instead to take 1 percent ownership in the casino.

Pappas was not a party to the license application approved today.

Gaming Board investigators raised a red flag with the board several years ago because Gatzaros had tax problems; they have since been resolved. Robert Young, an attorney representing Gatzaros, said that his client has never been convicted of a felony or misdemeanor and received his last traffic ticket 30 years ago. He said the Gaming Board has talked to virtually everybody who has known Gatzaros in five states and two countries -- Greece and Argentina -- but found nothing wrong.

You can reach Joel J. Smith at (313) 222-2556 or jsmith@detnews.com .

Mike Malik's partners also had a history of tax dodging; court ordered real estate negligence claims; and 40+ foreclosures

Michael J. Malik, Herb Strather and a handful of other partners (people involved in a Detroit gambling syndication) were among those who failed to win licenses from the Michigan Gaming Control Board in 1999 following thorough and confidential background checks.

The following was reported about two of Michael Malik's partners on 4.27.99 in the Las Vegas Review Journal:

The Detroit News reported Sunday on its review of public records on the local investors.

It said companies owned by local investor group leaders Herb Strather and Nellie Varner of Detroit have paid taxes late, and the U.S. Department of Housing and Urban Development cited a real estate company they own for several violations.

A bad real estate deal in 1986 led to the foreclosure of nearly 40 properties. This month, HUD issued five violations against a Detroit apartment building they own; courts have awarded their tenants about $750,000 in negligence claims.

Could simple character be the reason the MGCB refuses to license Michael Malik?

as published 4.27.99 in the Las Vegas Review Journal:

...Investor Michael Malik of Grosse Pointe, Mich., was arrested in 1997 and accused of hitting his girlfriend's 12-year-old son, the newspaper [Detroit News] said. The child is now Malik's stepson, but the boy's biological father is seeking custody. The charge was dropped after Malik served one year of probation and met conditions set by the judge...

By 2003, that boy's mother had divorced Michael Malik who it was later revealed had been having an affair with a younger woman: Heather Lufkins, the daughter of the then-chairman of the Bay Mills Indian Community L. John Lufkins. Malik has been trying to win approvals to site an off-reservation casino for the Bay Mills tribe in Port Huron and elsewhere since the mid-1990s.

MGCB standards for licensing; would Malik be eligible for a gaming license if standards are relaxed?

according an article published 9.14.07 in the Detroit News:

"The gaming board [MGCB] does not license an applicant convicted of any felony; a misdemeanor involving gambling, theft, dishonesty or fraud; or those who are 'unsuitable' due to questions of 'integrity, moral character or reputation.' "

Casino syndicator Michael J. Malik, Sr., a founder of MotorCity Casino, was disqualified from receiving a gaming license in 1999 and forced to sell his interests in MotorCity Casino prior to the gaming hall opening its doors to the public. Records used to determine qualifications have been sealed and deliberations over licensing have been kept confidential so it's unclear exactly why the MGCB declined to license Malik.

A bill in Lansing (House Bill 5212) introduced by state Rep. Steve Tobocman (D-Detroit) seeks to relax the legal requirement that requires all casino workers to clear an exhaustive background check and ease the conditions under which a license will be granted. It's unclear if the bill would have any impact going forward on Malik or others who were forced to sell their Detroit casino interests in 1999.

Move afoot in Lansing to relax standards used to license Detroit casino employees

9.14.07

State may relax casino hire rules
House bill would allow applicants with criminal records to be considered for nongambling jobs.

Charlie Cain / Detroit News Lansing Bureau

LANSING -- As Detroit's new, permanent casinos prepare to open, Michigan may relax the legal requirement that requires all casino workers to clear an exhaustive background check.

That should let some applicants with criminal records to at least be considered for some casino jobs.

Dealers, croupiers and others directly involved in gaming would still be subject to the investigation, required to obtain a state license.

But cocktail waitresses, custodians and others not directly associated with gambling would not, under a bill sponsored by [House Bill 5212] Rep. Steve Tobocman, D-Detroit...

...Tobocman said casinos already conduct background checks before turning names over to the Michigan Gaming Control Board for licenses. He said it's not likely that casinos would hire someone with a felony conviction for such crimes as larceny or fraud. But people convicted of other crimes, who have paid their debt to society, should not be automatically penalized for life, he said.

The gaming board does not license an applicant convicted of any felony; a misdemeanor involving gambling, theft, dishonesty or fraud; or those who are "unsuitable" due to questions of "integrity, moral character or reputation."

...The Michigan Gaming Control Board opposed the bill last year. The board's new executive director, Richard Kalm, said he wants to review the bill before deciding whether to maintain that position.

"We do eliminate convicted felons from working in the gaming area," said Kalm, who spent more than 30 years in the Macomb County Sheriff's Office...

..."we haven't eliminated people for misdemeanors, just crimes involving honesty, like larceny and misdemeanor fraud.

"We do a darn good job with the way the legislation is. We want to review it to make sure we're not taking a step back," he said.

A spokesman said MotorCity Casino, which plans to hire as many as 2,500 additional employees for its new casino, said it has taken no position on the bill. (Complete Story)

A one-time partner of Marian Ilitch & Mike Malik, had previous bribery conviction; bankrolled current plan for Cape Cod casino

9.01.07

Casino investor Strather has criminal past

By Stephanie Vosk
STAFF WRITER

Gambling tycoon Sol Kerzner isn't the only Mashpee Wampanoag casino investor with a charge of bribery on his record.

Detroit casino developer Herb Strather, the tribe's first and most visible investor, was arrested on a bribery charge in 1977 for trying to buy off a police officer in Michigan, according to a 1997 report in the Detroit Free Press.

Strather bankrolled the Wampanoag's effort to gain federal recognition, which cost millions of dollars. In exchange, Strather has said he would be given a portion of the development rights on a Wampanoag casino.

In 1997, two years before Strather started giving money to the Mashpee tribe, Strather told the Detroit Free Press that he was pulled over after drinking to celebrate a big real estate deal in 1977, and had an outstanding ticket on his record. When Strather offered the policeman a pair of new shoes if he let him pay the ticket the next day, he was arrested.

Strather paid a $500 fine and did community service for the misdemeanor, the Free Press reported.

The Times could not reach Strather for comment yesterday. Scott Ferson, the Wampanoag's spokesman, said yesterday that tribal leaders are aware of an arrest on Strather's record, though not of the specifics.

Shortly after federal officials granted the Mashpee Wampanoag preliminary federal recognition in March 2006, Strather told the Times he had given the tribe approximately $15 million, about two-thirds of which financed the tribe's quest for federal recognition.

Last spring, after the tribe officially received federal recognition, the tribe announced that Kerzner and his partner Len Wolman had signed on as the lead investors for a resort casino. Strather has since faded into the background of the tribe's quest to build a casino.

Kerzner and Wolman were the prime investors for the Mohegan Sun casino in Connecticut and Twin River gaming facility in Rhode Island.

Wolman said recently that he had a business relationship with Strather in Detroit prior to becoming involved with the Wampanoag.

Applicants for Indian casino licenses are intensely scrutinized by the U.S. Bureau of Indian Affairs. Others involved in the casino business, including investors, do not go through such stringent checks, if any, Ferson said.

The Mashpee Wampanoag Tribal Council plans to establish a gaming authority which will apply for, and if granted, hold the license for a casino, he said. The tribe never intended for Strather to hold the license, according to Ferson.

It's the licensees who have to be clean, he said. Bureau of Indian Affairs officials do not allow anyone with a felony conviction to be involved in casino operations.

The Mashpee Wampanoag Tribal Council has been in damage control mode for the past week following revelations that tribal council chairman Glenn Marshall was convicted of rape, a felony charge, in 1981. Marshall, 57, was also found to have lied about his military record when testifying before Congress. He resigned Monday.

"This is why the government has regulations on gaming," Ferson said of Marshall's conviction. "When the tribe applied for a license, that would have been known."

Kerzner, who was charged in 1986 of trying to bribe a South African government official in exchange for exclusive gaming rights, was never convicted. The charge was dismissed in 1997. He has since received at least one license from the Bureau of Indian Affairs to operate Mohegan Sun in Connecticut for a time. Kerzner has also secured commercial licenses in several states and abroad.

Strather, however, has had trouble getting a license.

In the 1990s, Atwater Entertainment, of which Strather was a founding partner, poured money into supporting a referendum question to allow casinos in Detroit. The grass-roots effort came after the Michigan governor ruled against allowing casinos in Detroit .

The referendum passed, and one of three licenses was subsequently given to Atwater for what would become the MotorCity Casino.

Nelson Westrin, former executive director of the Michigan Gaming Control Board, told the Times in 2001 that state investigators place any investor holding more than a 1-percent interest in a casino through a thorough background check.

The Detroit News reported at the time that Strather and his partner had experienced financial difficulties over their 25-year business relationship. They paid taxes late, and the U.S. Department of Housing and Urban Development cited a real estate company they owned for several violations, the News reported.

Strather subsequently sold his interests in the casino, which opened in 1999.

John Page, deputy director of enforcement for the Michigan Gaming Control Board, would not release any details yesterday of Strather's involvement in Detroit casinos other than he was a license applicant and later sold his share.

Stephanie Vosk can be reached at svosk@capecodonline.com

Three years after newspaper challenge, Barstow casino syndicators have still failed to produce ...

The following was written three years ago (March 2004) by Barry Gadbois, a regular columnist who contributed to the Desert Dispatch newspaper in Barstow, CA.

More than three years later, (and four years after being awarded exclusivity to the Barstow territory) Detroit-based Barwest LLC has failed to deliver on any of the challenges the columnist raised; among them

• Barwest still has failed to deliver land into trust.


• Barwest has yet to make a full public disclosure of those who are actually bankrolling the Barstow plans.


• Barwest president Michael J. Malik, Sr., has yet to be granted a gaming license anywhere else.
  
  

"...BarWest has had their exclusive agreement since last summer, yet little progress has been made. Despite their failure to deliver land into trust, investor Mike Malik has threatened to pull out completely if the city even entertains competing ideas.

No one has ever disclosed the complete list of investors that comprise BarWest, but we do know some of them. Malik spent a lot of money lobbying for the legalization of Indian gaming in Michigan. One of his partners, Larry Deitch, is a University of Michigan regent who authored the 1996 statute which gave birth to gaming in Michigan.

Mike Malik, along with investors Nellie Varner and Herb Strather, invested heavily in Detroit's MotorCity Casino. The Michigan Gaming Control Board determined that Malik, Varner, and Strather could not be granted gaming licenses to operate a casino. According to a Sept. 14, 1999 Las Vegas Review-Journal article ( "MotorCity Casino partners face questions from state regulators") Varner and Strather had problems with past real estate dealings, and investigators raised questions about Malik that were "related to federal tax matters."

If the aforementioned investors had decided to stay on board and appeal the decision, then the board could have disclosed their reasons for denial to the public, and if denied licenses they could have only sold their shares to recover their original investment. For their discretion Varner received $9.4 million, Strather cashed out to the tune of $18.4 million, and the amount of sale for Malik's shares according The Detroit News was not disclosed.

At the same time that Malik, Varner, and Strather sold their shares of the casino amid questions from the gaming control board, Larry Deitch also sold his shares in the casino. He made $2.35 million in an effort to prevent questions about conflict of interest since he was a public official with the University of Michigan. To be fair, this was Mr. Deitch's choice -- he was not compelled to do so.

http://archive.desertdispatch.com/2004/107970589870599.html

Michael Malik, a casino syndicator, has never been approved for gaming license

Michael J. Malik, Sr., failed to qualify for a gaming license with the Michigan Gaming Control Board (MGCB) in 1999 and was reportedly forced to transfer (or sell) his original shares in the MotorCity Casino venture to Marian Ilitch (details never disclosed).

Susbsequently, a venture owned/controlled by Michael J. Malik, Paradice Hunt Club LLC, submitted a vendor licensing exception application to the MGCB but no exemption appears to have been granted.

Malik, a recognized casino syndicator, is not known to have been granted a gambling license by any entity. Marian Ilitch has been licensed by the MGCB.

Here's a check list provided by the National Indian Gaming Commission (NIGC) that's used in the investigation of licensing determinations for Indian casino management contracts it must approve.

It 's reported that Malik and Ilitch have agreements with the Shinnecock Indian Nation, Bay Mills Indian Community, Big Lagoon Rancheria and Los Coyotes Band of Cahuilla and Cupeno Indians to not only develop any future casinos but also provide management services in the years immediately following opening of any gaming facilities established by these tribes.