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Casino at Center of Turmoil

The controversial owner seeks a permanent license amid claims of labor code violations and misconduct.

August 19, 2004|Sam Quinones | Times Staff Writer

After almost a year of contentious proceedings, the owner of the Hawaiian Gardens Casino will go before a state licensing board today to ask for a permanent gambling license.

Dr. Irving I. Moskowitz, a multimillionaire hospital owner who now resides in Florida, has gained international attention for funneling millions of dollars to pay for Jewish settlements on land in Arab neighborhoods of Jerusalem and in parts of the West Bank.

Moskowitz's casino is also the target of allegations by current and former employees who say that the operation has been the scene of loan-sharking, improper tip pooling and job-selling.

Moskowitz, Mike Sarabi, the club's general manager, and Beryl Weiner, an attorney who has represented Moskowitz for many years, all referred calls for comment to Bion Gregory, a Sacramento attorney representing Moskowitz.

"We don't believe there's any merit in the allegations," said Gregory.

"The Division of Gambling Control, in our experience, has been very good at investigating illegal activity in gambling casinos," Gregory said, referring to the branch of the state attorney general's office that investigates casinos. "I can't believe that these kind of allegations would not have been investigated. We've heard nothing from them."

By law, gambling licenses are to be accompanied by an extensive background investigation of the casino's owner and managers. The employees making the allegations, however, say that state agencies have not contacted them.

Moskowitz's activities have been controversial for many years. His supporters in Hawaiian Gardens, the smallest city in Los Angeles County, hail him as a financial benefactor. His casino provides 75% of the city's $11 million budget. In a 2003 city election, the slate of candidates supporting Moskowitz had no opposition.

His activities in the Mideast, however, have drawn a large number of critics, who consider him a danger to any prospects of peace between Israel and the Palestinians.

Those critics have made the hearings over Moskowitz's license the most extensive in the short history of the state's Gambling Control Commission.

The hearings have been contentious, with critics and supporters of Moskowitz sparring in exchanges that include gambling and local issues as well as debates over biblical teachings and Middle East politics.

Most of the state's roughly 100 card clubs already have upgraded their provisional licenses to permanent status since the commission was established in 2000, but Moskowitz's application has been stalled.

Anna Carr, spokeswoman for the Gambling Control Commission, said that a vote by the four-member commission on whether to approve the casino license is possible today.

Five current and former employees who allege improper activities at the casino have sued the establishment. Their suits allege labor-code violations. In interviews, the five, as well as two others who spoke on condition of anonymity, allege that loan sharking is widespread at the club and that the casino's money has been used to bankroll it.

Players as well as dealers are lent money, often at 10% interest per week, they said.

Kim Tran, a current employee suing the casino, said in an interview that she ran chips for a man who worked at the casino and, she said, was a loan shark. The man lent money to players, to dealers and to supervisors at an interest rate of 10% per week, she said.

Louie Lu, who was a dealer at the casino until he was fired in 2003, said he had repeatedly contacted state gambling agencies, sent them documents and letters and had seen no results. Lu said that he was an informant for the Department of Justice between 2001 and early 2003, giving several long interviews to three different teams of agents, and wearing a concealed tape recorder into the casino where he taped conversations. He said he never heard what results, if any, those investigations produced.

Lu is the lead plaintiff in a suit that was certified earlier this month as a class action on behalf of the club's card dealers. The suit alleges that the casino illegally takes dealers' tips and provides no record of what is done with the money.

Blackjack dealers must also give up to half their tips to supervisors, the employees allege in court affidavits and interviews. The employees who have filed suit claim that those tips are not shared with other employees, nor is any record kept of the money.

"Where does that cash go? It must go somewhere. It wasn't going to employees," said Lu.

In interviews, the employees also alleged that job-selling is commonplace at the casino. Dealers must pay up to $10,000 for jobs at the highest-stakes tables, they said.

In 1995, with few revenue options available to the city, residents voted in favor of a card club to be run by Moskowitz.

The campaign -- fueled by money from Moskowitz promoting the casino and by competing card clubs opposing it -- "was the largest campaign we'd ever seen," said Nelson Oliva, then Hawaiian Gardens city manager.

"You'd think we were running some kind of state campaign on some state issue."

Now, after years of turbulent battles, the firing of several top managers at City Hall and a recall of two City Council members, Moskowitz and his casino appear to have strong support among elected officials in Hawaiian Gardens.

The city's finances, meanwhile, have made an abrupt turnaround. Before the casino was built, Hawaiian Gardens was near bankruptcy. The city, located in the southeast portion of the county, even did away with its Police Department.

"I'm very thankful" for the casino, said Sue Underwood, who is the city clerk and a 32-year resident of Hawaiian Gardens. "We were $4 million in the hole. We tried a number of different things. The card club was just about the only thing we could have that would have any revenue."

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