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US govt says it will offer cascade of evidence against TDHC owner
Jury trial of Tinian Dynasty moved to June 30
The U.S. government wants to offer during trial Tinian Dynasty Hotel and Casino’s prior currency transaction reports filings with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network and its embattled owner’s failure to pay wages to its employees.
As this developed, U.S. District Court for the NMI Chief Judge Ramona V. Manglona moved the jury trial of Hong Kong Entertainment (Overseas) Investments Ltd., the owner of Tinian Dynasty, to June 30, 2015 instead of tomorrow, Tuesday.
Assistant U.S. attorney Russell H. Lorfing filed in court on Thursday a notice of “inextricably-intertwined evidence.”
In the notice, Lorfing said the U.S. government intends to offer evidence of HKE’s conduct regarding acts intrinsic to, or intertwined with, the charged conduct in the second superseding indictment.
Lorfing said what they intend to offer, among other evidence at trial, a correspondence with FinCen in 2000 wherein FinCEN definitely stated that the Bank Secrecy Act applies to Tinian Dynasty.
The prosecutor said they are going to offer as evidence representations to Bank of Guam of compliance with CTR and circulation of anti-money laundering policies in 2004 and 2008.
Last week, FinCEN assessed a $75-million civil penalty against HKE for “willful and egregious” violations of the Bank Secrecy Act, or BSA.
FinCEN Director Jennifer Shasky Calvery determined, among other things, that Tinian Dynasty failed to file thousands of CTRs and failed to develop and implement an anti-money laundering program to ensure ongoing compliance with the BSA.
Lorfing said they also intend to present evidence of failure to pay wages to Tinian Dynasty employees during the time period of the charged conduct.
He said other evidence to be offered is the outstanding tax debt to the CNMI government.
In March 2014, the CNMI Department of Finance released the tax lien on Tinian Dynasty over its failure to pay $41.7 million in various taxes.
Finance, through collection and remittance branch manager Richard Santos, filed in federal court certificates of release of CNMI tax liens that were separately issued to HKE.
Santos certified that HKE has satisfied the requirements of the Revenue and Tax Regulations for the taxes and “for all statutory additions, penalties, or both.”
In Finance’s five notices of tax liens, the government disclosed that the company failed to pay its Business Gross Revenue Tax, monthly hotel occupancy tax return, bar tax return, and employer’s quarterly withholding tax return from 1998 to 2011 tax period.
The tax liens are in the amount of $3,115,870.08; $335,351; $4,742,815.01; $2,425,233.25; and $31,083,833.30, for a total of $41,703,102.64.
In 2012, it was reported that Finance and Tinian Dynasty were already wrapping up their negotiations to settle Tinian Dynasty’s over $30-million tax debt. The settlement amount was not publicly disclosed.
Lorfing did not elaborate the issues they are planning to offer as evidence during the trial.
Lorfing, however, stated that they will offer direct evidence that is intrinsic to the charged conduct; is integral to defendant’s failure-to-file scheme; or to assist the U.S. government in offering a coherent and comprehensive story that will assist the jury in understanding the charged conduct.
Meanwhile, according to the minutes of Thursday’s hearing, Manglona agreed to continue the jury trial to June 30.
Attorney Bruce Berline, counsel for HKE, suggested the trial be set on June 30 with jury selection and the trial to start right after, instead of continuing with jury selection tomorrow, and taking a break until the end of June or early July.
Lorfing did not object.
At the hearing, Manglona stated that given the court’s prior ruling denying a motion to dismiss for lack of jurisdiction, the court was denying HKE’s motion to suppress evidence.
Manglona also, among other issues, denied HKE’s motion to dismiss 156 counts in the second superseding indictment. She stated she would issue a separate written decision.
The U.S. government filed in November last year 158 criminal charges against HKE.
The charges are one count of conspiracy to cause a financial institution to fail to file a CTR, 155 counts of failure to file a CTR, one count of failure to file a suspicious activity report, and one count of failure to maintain an effective anti-money laundering program. The indictment also has a notice of forfeiture.
