SunCruz Casinos offered offshore "cruises to nowhere", legally transporting passengers into
international waters beyond the reach of federal and state gambling laws. In the 2000s (decade), it became known for the involvement of some high-profile lobbyists such as
Jack Abramoff, and the murder of its former owner,
Gus Boulis
Konstantinos "Gus" Boulis (Greek language, Greek: Κωνσταντίνος Μπούλης; April 6, 1949 – February 6, 2001) was an entrepreneur, land developer, casino operator, and restaurateur of Greeks, Greek descent, who was murdered in 200 ...
.
Founding and investigation
In 1994 Boulis, already a multi-millionaire by founding the
Miami Subs
Miami Grill, formerly Miami Subs Grill, is a privately held restaurant chain, based in the US state of Florida. The chain has approximately 30 locations, the majority of which are in Miami-Dade, Broward, and Palm Beach County Florida. The compan ...
sandwich shop franchise, bought a number of luxury yachts. He remodeled the yachts as casinos, and began to operate his "cruises to nowhere", departing from the
Florida
Florida is a state located in the Southeastern region of the United States. Florida is bordered to the west by the Gulf of Mexico, to the northwest by Alabama, to the north by Georgia, to the east by the Bahamas and Atlantic Ocean, and to ...
coast into international waters. There, out on the sea, passengers would gamble at high stakes on
poker
Poker is a family of comparing card games in which players wager over which hand is best according to that specific game's rules. It is played worldwide, however in some places the rules may vary. While the earliest known form of the game w ...
,
blackjack
Blackjack (formerly Black Jack and Vingt-Un) is a casino banking game. The most widely played casino banking game in the world, it uses decks of 52 cards and descends from a global family of casino banking games known as Twenty-One. This fami ...
and
slots. Boulis called his fleet of 11 ships the SunCruz Casino line. By the time he entered into negotiations to sell the company in 2000, SunCruz Casinos was earning tens of millions of dollars in annual profits, and employed over 2,000 people.
Florida
Florida is a state located in the Southeastern region of the United States. Florida is bordered to the west by the Gulf of Mexico, to the northwest by Alabama, to the north by Georgia, to the east by the Bahamas and Atlantic Ocean, and to ...
state officials made several attempts to shut the business down, finally succeeding in 1999 when federal prosecutors charged Boulis with violating shipping laws over the ship's registration. U.S. shipping code forbids foreign nationals from owning American commercial vessels, and Boulis was a
Greek citizen. Boulis agreed to pay a $1 million fine, sell the business, and never work in the gaming industry again. So that Boulis would be able to get a fair price when he sold, the deal with the federal prosecutors would be kept a secret until the deal was closed. In January 2000, Boulis went looking for a buyer.
Purchase of SunCruz Casinos and political ties
Boulis' lawyer Art Dimopoulos worked at
Preston Gates Ellis & Rouvelas Meeds, a large firm in
Seattle, Washington
Seattle ( ) is a port, seaport city on the West Coast of the United States. It is the county seat, seat of King County, Washington, King County, Washington (state), Washington. With a 2020 population of 737,015, it is the largest city in bo ...
. Dimopoulos was tasked with finding a buyer for SunCruz.
Jack Abramoff, a lobbyist then employed at the same firm, heard about the situation. Abramoff told Dimopoulos that he knew buyers who would be interested. They included himself, but ethics rules prohibit the same law firm from representing a buyer and a seller, therefore Abramoff hid his interest in the purchase from his firm.
Abramoff enlisted Adam Kidan and Ben Waldman, acquaintances from his
College Republican days as partners in the deal.
The price was approximately $145 million; Abramoff and his partners would come up with a $23 million downpayment, and then other financiers would release loans.
Press accounts have suggested that Abramoff used his political connections to gain support for the deal in Washington.
Tom DeLay
Thomas Dale DeLay (; born April 8, 1947) is an American author and retired politician who served as a member of the United States House of Representatives, representing Texas's 22nd congressional district from 1985 until 2006. He was Republic ...
, then House minority whip, gave Boulis a flag that had flown over the Capitol building. Abramoff brought his lead financier in the deal to a fund raiser for DeLay in Abramoff's box at
FedExField.
Ohio
Ohio () is a state in the Midwestern region of the United States. Of the fifty U.S. states, it is the 34th-largest by area, and with a population of nearly 11.8 million, is the seventh-most populous and tenth-most densely populated. The sta ...
Republican Representative
Bob Ney
Robert William Ney (born July 5, 1954) is an American politician from Ohio. A Republican, Ney represented Ohio's 18th congressional district in the U.S. House of Representatives from 1995 until November 3, 2006, when he resigned. Ney's resignatio ...
aided the purchase in the House on several occasions. In March 2000, before the deal was closed, Ney entered comments in the
Congressional Record
The ''Congressional Record'' is the official record of the proceedings and debates of the United States Congress, published by the United States Government Publishing Office and issued when Congress is in session. The Congressional Record Inde ...
accusing the SunCruz management of cheating passengers.
Rep.
Dana Rohrabacher (R-Calif.) was listed as a financial reference for Abramoff in the purchase. He was also quoted in ''
The Washington Post
''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...
'' as saying "I don't remember it, but I would certainly have been happy to give him a good recommendation" and "He's a very honest man."
On September 22, 2000, in secret, Abramoff convinced Boulis to accept
promissory note
A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...
s for $20 million in exchange for a secret 10 percent interest in the newly reorganized SunCruz Casinos. The deal was doubly illegal: Abramoff and his partners were violating the terms of their purchase agreement with their financiers which required that they put up $23 million of their own money, and Boulis was violating the terms of his settlement with the government, which required that he separate himself entirely from his company.
The deal was closed on September 27, using false documents that purported to attest that Abramoff and his associates had paid the $23 million. On October 26, 2000, Ney entered comments into the ''Congressional Record'' praising the change of ownership. Ney later accused Abramoff of duping him.
Payment dispute and murder
The business relationship soured soon after the fraudulent purchase. Boulis allegedly clashed over the falsified wire transfer with an Abramoff associate. Abramoff was mostly a silent partner, but both he and his partners used SunCruz funds to pay for numerous personal expenses.
Boulis also alleged that one of Abramoff's partners had links to
organized crime
Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
.
The relationship between Boulis and Abramoff's partners grew so contentious that he had a fistfight with one of them at a business meeting in December 2000, with both parties allegedly making threats. Boulis was shot to death in Miami two months later in February 2001, in what police called "a gang style hit". A lawsuit brought by Boulis' estate alleges that an Abramoff associate made three payments of $10,000 to Anthony Moscatiello immediately prior to the murder.
/ref>
Abramoff's partners had hired Anthony Moscatiello as a business advisor, despite Moscatiello's previous indictment as former bookkeeper for the Gambino crime family
The Gambino crime family (pronounced ) is an Italian-American Mafia crime family and one of the "Five Families" that dominate organized crime activities in New York City, United States, within the nationwide criminal phenomenon known as the Ame ...
(led by Mafia crime boss John Gotti
John Joseph Gotti Jr.Capeci, Mustain (1996), pp. 25–26 (, ; October 27, 1940 – June 10, 2002) was an American gangster and boss of the Gambino crime family in New York City. He ordered and helped to orchestrate the murder of Gambino boss ...
), paying him $145,000 through SunCruz for services that were allegedly never rendered. Anthony Ferrari also received $95,000 from SunCruz as payment for security services, in addition to further sums in casino chips.
Moscatiello and Anthony Ferrari were charged with murder, conspiracy and solicitation to commit murder. James Fiorillo was charged with murder and conspiracy. In May 2006, an Abramoff associate told authorities that Moscatiello and Ferrari confided in him that another Gotti associate, John Gurino, killed Boulis. Gurino himself was killed in October 2003. Gurino previously wasn't part of the investigation.
Bankruptcy, investigations and indictments
SunCruz declared bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
in June 2001, and was subsequently auctioned off to new management in a bankruptcy action brought by Foothill Capital. Abramoff signed his stake in SunCruz over to the Boulis family estate, and another associate later turned over his stake for $200,000. Foothill settled with Abramoff for an undisclosed sum, and continued litigation against his partner.
To further support the loan application, both Abramoff and an associate provided personal financial statements. The lenders relied on both financial statements, and the counterfeit copy of the wire funds transfer, deciding to approve and fund the loan. Some of the proceeds of the loan were then wire-transferred to the account of Gus Boulis at Ocean Bank, in Miami, Florida. The copy of the wire funds transfer notification reflecting the transfer of $23 million from the buyers to the seller was fraudulent, as no such transfer of funds ever occurred, and the buyers had never made any cash contributions toward the purchase of SunCruz. Similarly, the personal financial statements provided to Foothill by Abramoff and his associates contained false information concerning their respective assets and liabilities.
On January 4, 2006, Abramoff pleaded guilty to conspiring to commit wire fraud and mail fraud, and of a separate charge of wire fraud, relating to the SunCruz purchase.
On March 29, 2006, Abramoff and one of his partners were sentenced to five years and ten months in prison -— the minimum allowed per the plea bargain -— and were ordered to pay restitution of more than $21 million for their involvement in the SunCruz casino deal.
Connections to Congressman Bob Ney
According to ''The Washington Post
''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large nati ...
'', Bob Ney
Robert William Ney (born July 5, 1954) is an American politician from Ohio. A Republican, Ney represented Ohio's 18th congressional district in the U.S. House of Representatives from 1995 until November 3, 2006, when he resigned. Ney's resignatio ...
came under investigation by prosecutors for his role in aiding the purchase, and was implicated in Abramoff's plea agreement. (In a separate Indian lobbying case, Abramoff pleaded guilty to charges including bribing a Congressman who was later identified as Ney.)
In March 2000, before a deal for Abramoff and others to purchase SunCruz was closed, Ney entered comments in the Congressional Record that were critical of the management of SunCruz: "Mr. Speaker, how SunCruz Casinos and Gus Boulis
Konstantinos "Gus" Boulis (Greek language, Greek: Κωνσταντίνος Μπούλης; April 6, 1949 – February 6, 2001) was an entrepreneur, land developer, casino operator, and restaurateur of Greeks, Greek descent, who was murdered in 200 ...
conduct themselves with regard to Florida laws is very unnerving. Florida authorities have repeatedly reprimanded SunCruz Casinos and its owner Gus Boulis for taking illegal bets, not paying their customers properly and had to take steps to prevent SunCruz from conducting operations altogether." It is alleged that this statement was intended to pressure SunCruz to sell to Abramoff on terms favorable to the latter.
It is alleged that Ney, like other Republicans in the House, was under pressure to raise money for the Republican National Congressional Committee (RNCC) in October 2000, a month prior to the November elections. In an October 23 e-mail from Abramoff to business partner Michael Scanlon
Michael Scanlon (also known as Sean Scanlon) is a former communications director for Rep. Tom DeLay, lobbyist, and public relations executive who has pleaded guilty to corruption charges related to the Jack Abramoff lobbying scandal. He is curre ...
, Abramoff asked "Would 10K for NRCC from Suncruz for Ney help?" Scanlon replied, "Yes, a lot! But would have to give them a definite answer--and they need it this week..."
The $10,000 was sent to the RNCC within days, and Ney got credit for raising it. Scanlon wrote a draft statement for Ney that Adam Kidan, the main partner of Abramoff in purchasing SunCruz. Ney then inserted the statement into the October 26 Congressional Record.
References
External links
SunCruz Casino official site
{{Jack Abramoff
Gambino crime family