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Jeff German

Former Palms employees indicted in racebook and sportsbook scheme

24 August 2012

LAS VEGAS -- A former manager of The Palms Casino Resort racebook and sportsbook and two other ex-employees have been indicted by a federal grand jury in a betting scheme authorities say defrauded the resort out of more than $800,000.

Michael Albanese and the other employees - Matthew Kidle, an administrator, and Kassie Baker, a ticket writer - are accused of using their sportsbook positions to accept "invalid" wagers on horse races.

A well-known Palms bettor, Charles Pecchio, also has been charged in the scheme, which occurred between July 2006 and July 2007. Other bettors are alleged to have been involved, but no one else is charged.

"We don't see this type of activity very often," said Jerry Markling, chief of enforcement for the Nevada Gaming Control Board, which participated in the investigation with federal Homeland Security agents. "This scheme can only work if you have employees involved."

Markling said Thursday that the Palms cooperated in the investigation.

All four defendants are facing a single felony charge of conspiracy to commit wire fraud. The federal indictment was returned under seal July 24 and made public earlier this month.

The defendants came together to "place, accept and honor invalid quinella wagers" on horse races at the Palms sportsbook, the indictment alleges.

In a quinella wager, the bettor picks the first- and second-place winners without specifying their order. If the two selected horses finish first and second, the bettor wins. Variations of the quinella allow the bettor to pick a combination of three horses to finish first and second.

According to the indictment, the odds of winning a quinella bet increase if horses withdraw or are scratched from a race. The Palms had a policy of forbidding quinella wagers on races with fewer than six horses. Bets placed on races that ended up with fewer than six horses were to be canceled and refunded.

Albanese and the two other indicted sportsbook employees conspired to accept invalid quinella bets from Pecchio and others in races with less than six horses, the indictment alleged. If the bettors picked a winning quinella combination from a diminished field, the defendants paid the winnings with casino funds. If the bettors lost such a wager, they would get a refund.

Prosecutors are seeking a forfeiture judgment against the four defendants of the more than $800,000 the Palms is alleged to have lost in the scheme.

Albanese was taken into custody on August 10 and later released by a federal magistrate on his own recognizance after pleading not guilty to the conspiracy charge. His lawyer, Robert Langford, did not return phone calls on Thursday.

In an online resume, Albanese, who lists his current occupation as a sports analyst, said he managed the Palms sportsbook from August 2005 to February 2007.

Kidle and Baker have yet to be taken into custody and are awaiting a court date. Assistant U.S. Attorney Timothy Vasquez filed a motion Thursday asking U.S. District Judge Miranda Du to issue a summons and set a date for them to appear for arraignment.

An arrest warrant has been issued for Pecchio.

Kidle said in his online resume that he worked at the Palms sportsbook from April 2006 to October 2007. He said he was responsible for opening and closing the sportsbook, balancing the daily cash drawers and posting sporting events and horse races.

Palms spokesman Alex Acuna would not comment on the former employees or the investigation.

"With few exceptions, Palms does not provide information regarding its current or former employees," Acuna said. "Additionally, Palms generally does not comment on pending investigations or litigation."

The resort's sportsbook is now run by Cantor Gaming.