The director of an alcoholism rehabilitation center that runs a multimillion-dollar charity bingo operation in Hawaiian Gardens has been arrested on suspicion of illegally paying wages to himself and other employees.
Jack Blackburn, founder and executive director of Cooper Fellowship Inc., was arrested Sept. 18 by investigators from the district attorney's office, which has been conducting a probe of the bingo operation since April, 1984.
Among Most Profitable
Cooper Fellowship's charity bingo operation in Hawaiian Gardens is believed to be the most profitable bingo game in California, with gross revenues exceeding those of many large poker clubs in the state, law enforcement officials say.
Funds from the bingo games are used to subsidize the group's Santa Ana-based alcoholism rehabilitation center, Cooper Fellowship officials say. The center houses about 100 recovering alcoholics in several family-style houses located in a quiet residential neighborhood.
Attorney Has No Comment
Blackburn could not be reached for comment. His attorney, Ronald Davis, said he wanted to withhold any response to the arrest until he has seen police reports on the incident and has a chance to study the specific charges.
In the past, Davis has said he felt law enforcement officials were misinterpreting state laws and had singled out Cooper Fellowship's bingo operation simply because it has been so successful.
Lawyers for the state attorney general's office contend state law prohibits charities such as Cooper Fellowship from paying their employees with bingo proceeds, although the profits can go toward other operating expenses. Blackburn was booked at Orange County Jail after the 7 p.m. arrest, then released early the next morning when he posted $1,500 bail, Deputy District Atty. James Koller said. Blackburn is to be arraigned Oct. 10 at Municipal Court in Cerritos.
Besides the wage allegation, Blackburn is suspected of commingling profits from the bingo operation with other funds used to run Cooper Fellowship. According to the state Penal Code, bingo profits must be kept in a special account and used only for charity.
Blackburn is also suspected of staffing the bingo operation with people who do not work with the rehabilitation center, a practice prohibited by state law.
If convicted of the wage allegation, Blackburn could face a fine of up to $10,000 and six months in jail. The other counts carry a maximum sentence of six months in jail and a $1,000 fine.
Blackburn has been arrested on bingo-related offenses before. While operating an Anaheim bingo game in 1980, Blackburn pleaded guilty to charges of laundering campaign contributions going to a group trying to recall two Anaheim City Council members who favored limits on bingo. That same year, Blackburn was acquitted on charges that a Fontana bingo game he helped run was being operated illegally.
Koller said an audit conducted by the state attorney general's office in January was being used as "the backbone" of the current case against Blackburn. The audit covered a 20-month period beginning in January, 1983.
Salaries Up to $750 a Week
A salary sheet in the report indicated Blackburn paid himself $700 a week from proceeds of the bingo operation, which is run out of a small commercial shopping center near Pioneer Boulevard and Carson Street. Larry Davis, Cooper's business manager, received $750 a week and 22 others were paid weekly salaries ranging from $100 to $500, according to the salary sheet.
In addition, the audit report said Cooper Fellowship paid former Anaheim City Councilman W. J. (Bill) Thom $10,400 for "community and public and professional services." Thom represented Cooper Fellowship when the group applied for a business license in late 1983 to begin operating the bingo hall in Hawaiian Gardens.
The bingo parlor, which opened its doors in February, 1984, grossed more than $11 million last year, according to city officials. Recently, officials said, the operation has been even more profitable, grossing about $1.7 million a month. As many as 600 people fill the Hawaiian Gardens bingo hall each night, with a $250 prize awarded the winner of each game.
Bingo has been an economic bonanza for Hawaiian Gardens as well. The city's 1% take of the bingo parlor's gross receipts amounted to about $117,000 last year, one-tenth of the city's general operating fund.
While the city has the power to revoke the bingo parlor's business license and shut down the games, Councilman Jack Myers said it is too early to determine if city leaders will take action against Cooper Fellowship.
"It would be very premature to comment on it," Myers said. "There's still too many ifs, ands or buts."