Judge to decide evidence issue in gambling case

AP News
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Posted: Dec 18, 2014 4:14 PM
Judge to decide evidence issue in gambling case

LAS VEGAS (AP) — A federal judge said Thursday she'll rule soon whether the FBI improperly entered suites at a Las Vegas Strip casino without a warrant during a probe of what prosecutors say was illegal gambling involving a Malaysian businessman and his son.

U.S. Magistrate Judge Peggy Leen in Las Vegas heard three days of testimony during an extraordinary hearing focusing on how undercover state and federal agents carried out the ruse to disconnect Internet service to several exclusive Caesars Palace villas then posed as repairmen to get inside.

Testimony showed the agents had no warrant but used the initial entry to collect evidence to obtain a warrant to try to prove the men were operating a ring that handled $13 million in illegal bets on FIFA World Cup soccer games in June and July.

They also didn't have the permission of Caesars Palace employees, although a casino technical contractor cooperated by shutting off the Internet signal and providing his company uniforms to FBI and Nevada Gaming Control Board agents who entered the suites.

Defense attorneys Thomas Goldstein and David Chesnoff maintained the ruse was an unconstitutional warrantless search of private property.

"The government conceded that this type of operation has not been employed before and even Caesars Palace recognized the substantial privacy issues at stake," Chesnoff said outside court.

U.S. Attorney Daniel Bogden said it wouldn't be appropriate to comment with the matter pending. Laura Bucheit, FBI special agent in charge in Las Vegas, also declined to comment.

The judge didn't indicate when she would rule. But a decision is expected ahead of the Jan. 12 trial scheduled for Wei Seng "Paul" Phua, 50, and his son, Darren Wai Kit Phua, 23. Each faces charges of operating an illegal gambling business and unlawful transmission of wagering information. Each charge carries a penalty of up to seven years in prison.

The elder Phua also faces charges of running an illegal sports gambling business in the Chinese gambling enclave of Macau.

The Phuas were arrested by federal authorities July 13 with six other people and released two weeks later with GPS monitors. The $2.5 million bail of the Phuas was posted by poker professional Andrew Robl and 10-time World Series of Poker Champion Phil Ivey.

The government also impounded Wei Seng Phua's $48 million private Gulfstream jet as collateral.

Five Chinese citizens pleaded guilty last week to reduced charges in the case, paid a combined $950,000 in fines, and forfeited hundreds of thousands of dollars each. Charges were dropped against another person. All were ordered out of the U.S. for at least five years.

No one testified this week that they'd ever heard of investigators anywhere else shutting off Internet service to prompt a call for repair as an invitation to enter a residence.

Chesnoff said no American would be safe at home if such a search was deemed proper.

He and Goldstein also suggested that investigators deliberately tried to cover up the ruse by scrubbing references to it from a warrant application, investigative files and FBI reports turned over to the defense in preparation for trial.

It came to light when the defense was given lapel camera video shot by the undercover agents posing as Internet repairmen.

FBI Special Agent Minh Pham conceded he didn't tell the magistrate judge who issued the warrant that the evidence they collected had been obtained by deception.

"I didn't think it was important to provide all the details," Pham testified during tense questioning by Goldstein, with top Las Vegas FBI and U.S. attorney's officials listening in the courtroom audience.

"We had consent from Caesars employees," the agent maintained.

Testimony later showed that Caesars Palace officials never endorsed the ruse.

Paul Urban, a security chief for casino parent company Caesars Entertainment, testified that corporate lawyers were troubled by questions of customer privacy and advised him not to grant consent.

Michael Wood, the independent technical contractor who worked most closely with the state and federal agents, said he cooperated with the FBI and state agents because he thought Urban approved the plan.

Another FBI agent said he assumed they had the go-ahead because he knew Pham and Nevada Gaming Control Board Special Agent Ricardo Lopez consulted with a federal prosecutor, FBI lawyers and Caesars executives.