California Casino At Risk Of Shut Down Due To Financial History With Utah Polygamous SectLake Elsinore Casino Owners Tied To Utah Businesses Involved In Money Laundering Scheme |
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California Attorney General Xavier Becerra wants to deny one of its state’s casinos a gambling license because of shady past financial transactions with businesses surrounding Utah polygamous sect.
In a recent filing, the California Bureau of Gambling Control showed that Lake Elsinore Hotel and Casino had several inconsistencies in their financial records regarding their loans with businesses tied to the Davis County Cooperative Society, a powerful Mormon group in Utah.
While there have been no criminal allegations, the bureau claims that the company has not done enough to guard against money laundering. If regulators accept the recommendation of Becerra, the property could be forced to close or its owners forced to sell.
According to the Salt Lake Tribune, four members of the Kingston family, one of the wealthiest families in Utah began the process of purchasing the casino in 1991. The family bought the casino for $4 million and borrowed $3 million from Fidelity Funding Co. When the owners applied for a license, they reported owing Fidelity $6 million.
In 2016, the Kingston family reported owing $3.38 million to World Enterprises, another Utah business that shares an office building in Salt Lake City with Fidelity Funding. In the filing, the bureau says that the Kingston Group has never disclosed the terms of the loans or what the money was used for.
Both World Enterprises and Fidelity Funding Co. have been listed in a fraud case against a renewable energy company, where executives pleaded guilty to fraud and money laundering in a scheme that resulted in $470 million in illegal tax credits.
The casino has been operating on continual short-term, temporary gambling licenses since the late 1990s when the state changed its licensing process. There was a continual miscommunication between the casino and state regulators that allowed the casino to stay in business, despite concerns from the state about financial transactions.
An administrative judge looked at the situation and recommended that the casino be allowed to resubmit its license and allow one of its co-owners, Joseph Kingston, to transfer his shares of the company to his second cousin, Chad Benson. Benson has been working as the casino’s COO for the last five years.
The state regulators rejected the judge’s opinion and told the casino to comply with previous requests for more information or risk being put out of business.
“This has created the risk that money laundering and terrorist-financing activities at the gambling establishment will go undetected or unreported,” said regulators in their latest “Statement of Issues.”
Despite the concern, there are no criminal charges levied against anybody involved with the casino.
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