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Gaming Guru

Jeff German
 

Bad checks cited in historic case

4 February 2009

LAS VEGAS, Nevada -- In its largest criminal case ever, the district attorney's bad check unit is seeking a felony arrest warrant for a high-rolling philanthropist who owes $14.7 million in Las Vegas gambling debts.

According to prosecutors, Terrance K. Watanabe, 52, of Omaha, Neb., owes the massive debt to Caesars Palace and the Rio, which are owned by Harrah's Entertainment Inc. On top of that, Watanabe now is to be billed a state-mandated fee for the bad check unit's handling of the case. Because the fee is based on the size of the debt, the amount for Watanabe is $1.48 million.

Watanabe has lost in excess of $100 million in a whirlwind of gambling in Las Vegas over the past few years, according to a knowledgeable source.

Watanabe's wealth comes from the Omaha-based Oriental Trading Co., a wholesale novelty importer founded by his father. The younger Watanabe ran the company from 1977 until 2000, when he sold it. He has his own charitable trust foundation and is known as a generous donor to nonprofit organizations.

Chief Deputy District Attorney Bernie Zadrowski, who runs the bad check unit, said Tuesday that he decided to proceed with the criminal case against Watanabe after months of negotiations failed to result in an agreement to pay off the Caesars Palace and Rio debts. "The state has to move forward," Zadrowski said.

Harrah's, he explained, had first asked the district attorney to open a criminal case last May. In Nevada, unpaid casino markers can be prosecuted as bad check cases.

Prosecutors on Tuesday sent the Watanabe case to Las Vegas Justice of the Peace Bill Jansen, who is being asked to issue the arrest warrant. The approval process usually takes several days.

Watanabe's Las Vegas attorney, David Chesnoff, said he hopes to strike a deal with the district attorney to allow Watanabe to turn himself in at the Clark County jail and be immediately released on bail after going through the booking process.

Chesnoff acknowledged that Watanabe has been a prolific gambler here.

"Casinos in Las Vegas and the taxpayers have benefitted from his play over the years," Chesnoff said, adding that the Nebraskan "is very well-liked by the employees of the gambling industry."

"We're looking forward to going to court," Chesnoff said, "especially with respect to the issue of whether or not he had the intent to avoid his obligations."

Under state law, Watanabe is only guilty of the all the charges if he intended to defraud the casinos.

Watanabe is facing a four-page complaint prepared by the district attorney charging him with two counts of theft and two counts of passing bad checks at the Rio and Caesars Palace in 2007.

He allegedly obtained $2.7 million in markers from the Rio by writing eight bad checks from Oct. 22 to Nov. 26, 2007, according to a copy of the complaint obtained by the Sun. He obtained another $12 million in markers from Caesars Palace using 30 bad checks from Nov. 11 to Dec. 11, 2007, the complaint charges.

The checks, the complaint notes, ranged from $200,000 to $875,000.

Harrah's spokesman Gary Thompson declined to comment on the Watanabe case.

This isn't the first time Watanabe has run afoul of the bad check unit.

It opened a criminal investigation against him last year at the request of Green Valley Ranch, which alleged he had failed to pay $1.2 million in gambling markers taken out in October and November of 2007, Zadrowski said. The case, however, was dropped in September after the Henderson casino allowed Watanabe to pay back $790,000 as part of a settlement.

The Bellagio also had asked the district attorney to open a criminal case last year against Watanabe, stemming from a $1.25 million gambling debt, but the charges were dropped in July following an undisclosed settlement, Zadrowski said.

The Rio and Caesars Palace case also could be dropped if Watanabe pays the full amount, nearly $16.2 million, Zadrowski said.

The Watanabe prosecution tops the case of former Fry's Electronics Vice President Ausaf Umar Siddiqui in terms of a dollar amount allegedly owed to casinos. The bad check unit, Zadrowski said, pursued a criminal case against Siddiqui over gambling debts totaling $12.2 million. Siddiqui was indicted last month on federal wire fraud and money laundering charges in what authorities allege was an elaborate scheme to obtain $65.6 million in kickbacks from Fry's vendors. Money from the scheme allegedly was used to pay off some of Siddiqui's gambling debts here.