Prosecutors dropped all charges against Sabrina Eddy, a former Monarch Casino Resort and Spa employee at Black Hawk, in connection with Colorado’s $500,000 theft scandal. This decision follows the First Judicial District Attorney Office’s investigation into an extensive scam that targeted Eddy without her knowledge.

Sabrina Eddy Acted in Good Faith

Eddy worked as a casino cage cashier when she was caught on camera taking stacks of cash worth $500,000 from the casino vault in March 2023. But more facts about what happened that night presented another side to this story, reported The Denver Post.

According to reports, Eddy got a call plus texts from supposed high-ranking casino officials instructing her to move the money to an individual posing as a lawyer waiting at some nearby hospital so as not to breach a contract. In trust for the authority figures, she complied with these instructions without knowing they were part of an elaborate plot by international scammers.

Their intricate plan involved getting employees within casinos to transfer funds to individuals posing as representatives authorized by the establishments. Eddy, believing she was acting in the casino’s best interest, handed over the cash to a stranger who claimed to be the attorney in question.

Eddy’s Swift Action Helps Nab Casino Criminal

At some point, Eddy became suspicious and she immediately notified security personnel working there. Because of her quick action another criminal involved in the scheme named Juan Ivan Gutierrez Zambrano was apprehended later pleading guilty.

A warrant for the arrest of a third suspect, who is presumed to be outside the United States, has been issued, but it has been kept confidential. Authorities have chosen not to disclose whether any of the stolen funds have been retrieved.

Though it seemed like an open-and-shut case against Eddy, further investigation revealed evidence that proved her innocence. The prosecutors found out that she acted in good faith without gaining anything from the theft. Therefore, they regarded it as unethical to charge her.

The dismissal of charges marks the end of a tumultuous chapter for Eddy, who endured months of legal uncertainty following her arrest. The revelation of her innocence underscores the vulnerability of casino employees to sophisticated scams and highlights the need for heightened vigilance within the industry.

Monarch Casino Resort and Spa which is located in Black Hawk and is owned by Nevada-based Monarch Casino and Resort Inc., declined to give any comment about the court’s decision. 

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Heathcliff Farrugia, the CEO of the Malta Gaming Authority (MGA) until his resignation in 2020, has been found guilty of sharing classified information with Yorgen Fenech, owner of a number of casinos including Hilton Malta and Portomaso Casino and alleged mastermind behind journalist Daphne Caruana Galizia’s murder. The court convicted Farrugia for leaking details about an impending audit at a rival gaming establishment owned by Eden Leisure Group.

Text Messages Show Former MGA Boss Informed Fenech of Upcoming Casino Audit

The prosecution built their case on material extracted from Fenech’s mobile phone when it was confiscated during his 2019 arrest. This device was later examined by Europol who identified a string of messages sent between him and Farrugia. These texts showed that the former MGA boss had tipped off Fenech about an upcoming inspection being conducted at a rival casino not connected to his Tumas Gaming company, as reported by Times of Malta.

During the exchange, Fenech commented on an anti-money laundering review of his own casinos that had damaged Portomaso’s and Oracle’s (both owned by Fenech) reputations. Farrugia then responded that findings were yet to be made public and promised to do what he could to delay their release. 

He went further by divulging information regarding another probe set for Casino Malta, owned by Eden Leisure Group, saying there would be a problem on Tuesday without specifying which Tuesday or what exactly he meant thereby.

Court Rules Against Former MGA CEO, Highlighting Confidentiality Breach

During the hearing, inspector George Frendo testified how these messages signified a breach of confidentiality committed by Farrugia. However, Farrugia argued that this disclosure was only trying to console Fenech and show that such actions were taken across the whole sector. 

Magistrate Ian Farrugia, who presided over the case, eventually ruled there had been a violation of professional duties and that Farrugia was expected to keep these facts a secret as the information was highly confidential. 

Although he faced serious charges, Farrugia received a conditional discharge sentence meaning unless he commits another crime during the next three years he will serve no time in prison. However, Farrugia still plans to appeal this decision.

Farrugia resigned from MGA after being questioned by police officers representing the Malta police force who believed there were grounds justifying further action. His time at MGA saw him occupy various positions before eventually reaching the top job in 2018. 

The MGA has come under increased scrutiny following the Daphne Caruana Galizia murder probe that has so far caused significant political fallout within Malta.

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A person identified with the initials J.G., an 18-year-old hacker from Wisconsin, who allegedly stole over $600,000 from DraftKings giant by hacking into the online accounts of more than 1,000 registered players, has pleaded guilty to the charges brought to him.

J.G. allegedly stole the login and password information of over 1,600 DraftKings members and used the information to hack into over 60,000 accounts on the online sports betting platform in November 2022. 

“Fraud Is Fun”

As per information from federal prosecutors in Manhattan, the teenager has been accused of sending the stolen login information to other individuals who then made use of it to withdraw over $600,000 from around 1,600 accounts. 

The procedure, which is referred to as credential stuffing, was openly admitted by the 18-year-old who attempted to take cash out of other players’ accounts in an illegal manner. He transparently texted one of his co-conspirators saying “Fraud is fun,” according to official court documents, adding that he was “addicted to seeing money” in his account.

When investigators searched his home in February 2023, they allegedly discovered a series of programs that the teenager had used in credential stuffing.

The young man had apparently used more than 700 individualized files to set up a website used to launch the cyber-attacks on his computer. The device contained around 40 million password and username combinations, according to law enforcement representatives. 

DraftKings Says It Reimbursed All the Stolen Money

The investigation also found that the hacker had stolen more than $2.1 million prior to his 18th birthday, making around $15,000 per day between 2018 and 2021 alone.

He pled guilty to a count of conspiring to commit computer intrusion. The charge features a five-year in-prison maximum sentence. The alleged hacker will be sentenced at a later date. 

His case is prosecuted by the Southern District of New York’s Frauds and Cybercrime Unit. 

The prosecution is represented by assistant US attorneys Kevin Mead and Micah Fergenson.

The company has confirmed the hacking event but did not provide any names in the suit. 

DraftKings also reimbursed all the stolen money from customers, using a statement issued by a spokesperson to explain the safety and security of the personal and financial information of their customers “is of paramount importance” to them.  

The hacker was also charged with alleged swatting, which is the process of practice of making a hoax call to the emergency services. It is believed that the teenager paid people with Bitcoin to make fake bomb-threat phone calls to his high school because he was “bored” and eager to go home, according to court documents. 

Earlier in the week, DraftKings unveiled its new Progressive Parlay feature that will target the fantasy gaming market in an attempt to push back against the growing popularity of competing fantasy sports operators.

The news follows the operator’s launch during Maine’s first weekend of regulated sports betting via a partnership with Passamaquoddy Tribe and the publishing of its Q3 results showcasing strong performance. 

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A businessman from Kent was accused of running illegal gambling operations in Florida. The man, who had allegedly operated an illegal slot machine business, has now pleaded not guilty to the charges.

The defendant, Timothy Surgen, is a 57-year-old man who, according to multiple charges, leveraged his company, Surgen Enterprises, to operate slot machines. His alleged violations have been outlined in over a hundred charges, claiming that he offered slots at the Black Beards Super Game Room, Games N More and Treasure Island Arcade properties.

For reference, Florida’s laws prohibit slot machines that pay out cash.

In addition to possessing slot machines and running illegal gambling operations, Surgen faces charges for money laundering.

Plaintiffs Allege Surgen Operated Illegal Gambling and Laundered Money

Surgen Enterprises was founded in Ohio in 2012. The company launched in Florida in 2018, where its owner filed it as a foreign limited liability company based of out Ohio.

In 2019, Surgen applied for a new business application, allowing him to establish Treasure Island Arcade, one of the venues where he offered illegal slots. The venue was officially listed as an arcade business offering 50 machines and overseen by three employees.

Games N More, one of the other venues in question, was launched in 2022 and was listed as a 20-machine arcade with four employees. Black Beards Super Game Room was founded that same year and was listed as an arcade with 25 machines and four employees. These two properties were notably founded by a former Surgen employee.

Between November 2022 and September 2023, investigators probed into Games N More and Treasure Island Arcade. Undercover agents spotted armed guards and learned that the venues offered multiple cash slots. To confirm that the machines were illegal, the agents tried to exchange cashout tickets for money and gift cards – a practice forbidden in Florida.

Surgen, who has now pleaded not guilty to running illegal gambling operations, is believed to have generated more than $304,000 of illegal money.

Surgen faces further charges.

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The Californian lawyer allegedly used more than $8 million of her clients’ money to sustain a lifestyle of luxury, involving frequent gambling bouts. She has now agreed to plead guilty to wire fraud and money laundering, based on information provided by the California Central District Court. King is said to have gambled $300,000 a day.

Crime Referred to the FBI for Investigation

King spent six months in a VIP suite at Wynn where she was gambling at the casino and visiting other properties as well. The funds used to fuel this habit were mostly owned by investors who had invested in King Family Lending LLC (KFL) in the hopes of securing a high yield on their investment.

King advertised her company as an entity that had been offering loans to celebrities and professional athletes, which was based on a “pawn shop model” whereby the loans were secured with valuables owned by the high net worth individuals.

However, this was a front, the court found out as not a single loan had been issued under KFL. Then, in February this year, one of the investors, LDR International, pressed on and made accusations that King had been misusing the money and pocketed more than $10 million in investor money. LDR International did not lose any time and referred the case straight to the FBI.

Even before that, King had faced some difficulties. She was prohibited from entering Wynn last year when it was found out that she was also trying to scam staff members and fellow guests. An employee at the casino invested her $5,000 savings in the business.

A Husband Who Is Not Happy with His Wife

Even more interestingly, King is the wife of Kamran Pahlavi, the great-nephew of Iran’s last Shah. He commented on her case in an interview for LA Magazine in which he said that he had left his wife after he found out that she was involved in shady dealings. It was he who introduced King to LDR in the first place, however.

As to her prison term, King is now looking at a less severe penalty, with prosecutors acquiescing that she should receive a penalty in the lower end. This means that she is looking at anything between three to five years if a judge shows lenience. Conversely, a crime such as hers may put her away for up to 30 years instead.

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The Phillipines’ Anti-money Laundering Council has released the report of the study it conducted into the junket sector of the country’s casino industry, especially in terms of suspicious transactions and terrorism financing. Findings from its analysis made the body conclude that the casino sector needs to put in place stronger procedures to combat money laundering and terrorism financing.

With The Phillipines being on the grey list of the Financial Action Task Force due to lax AML/CTF controls, the AMLC decided to launch an investigation into the casino sector. While the investigation uncovered several issues, one of the main discoveries of the investigation is the non-reporting of multiple transactions by casino junket operators.

The Phillipines casino sector permits junket operators who persuade high-rollers with incentives like all-expense paid accomodations just to get them to gamble at a partnering casino. But the agreement is that all transactions made while gambling must be reported to the casino.

However, the AMLC’s analysis revealed that junket operators have failed in complying with this procedure. The body gave an instance at an unnamed integrated resort where a junket operator repeatedly failed to file a suspicious transactions report despite such occuring even up to the tune of Php1.58 billion (US$29 million). This is asides several other instances of non-compliance by junket operators.

The body noted: “The heavy use of physical cash by casino players of covered and suspicious transactions by certain casino junket operators contributes to the [issue], coupled with the non-reporting vulnerability of high-risk integrated resorts to money laundering risks,”

This has made the AMLC note four key risk areas casino operators should watch out for as they deal with junkket operators. This includes violation of junket agreements; the involvement of junket operators in criminal conspiracy; the purchase of chips with small-denomination currency, followed by modest gambling actions; and conduct of financial transactions not commensurate with declared source of funds.

With Macau closing down junket operations in its casino sector, other countries are starting to take a hard look at how junkets operate and how to mitigate the risks.

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