Massachusetts’ Supreme Judicial Courtroom has ordered a decrease court docket to reexamine the circumstances surrounding Wynn Resorts’ buy of the land on which the Encore Boston Harbor now stands.
Charles A Lightbody, above, was a hidden director of FBT, however he and two administrators had been acquitted of fraud by a federal jury in 2016. (Picture: Boston Globe)
A lawsuit introduced by the previous landowner, FBT Everett Realty, alleges the Massachusetts Gaming Fee (MGC) improperly coerced Wynn Resorts into lowering the plot’s buy value by $40 million.
The go well with was thrown out by the decrease court docket final summer season – wrongly, in keeping with Justice Scott Kafker in an opinion launched Monday. Kafker wrote that the character of the fee’s regulatory motion was “extremely uncommon.”
Hidden Felon
In 2012, Wynn Resorts entered right into a conditional settlement with FBT to purchase the land, a contaminated former chemical plant on the Mystic River.
A 12 months earlier, state residents had voted to legalize casinos, and Wynn was fiercely contesting the only real East Massachusetts gaming license with Mohegan Solar.
Wynn agreed to buy the land for $75 million if it gained the licensing bid, which it did, in 2015. However the land solely offered for $35 million.
A 12 months earlier, whereas the MGC was doing due diligence on Wynn Resorts, investigators grew to become involved that FBT was concealing a hidden director with alleged hyperlinks to organized crime. Massachusetts gaming legislation prohibits felons taking advantage of the on line casino business.
FTB maintained that convicted legal Charles Lightbody had divested himself of his curiosity within the firm a 12 months earlier than Wynn resorts got here knocking.
State prosecutors later sued FBT for fraud, alleging that two administrators, Anthony Gattineri and Dustin DeNunzio, had tried to hide Lightbody’s ongoing stake.
All three had been indicted on federal fraud costs, however cleared in 2016. The decide in that case famous that there was nothing in Massachusetts legislation that prohibited a felon from taking advantage of the sale of an asset to a on line casino firm, solely from precise gaming operations.
Windfall for Wynn
FBT claims the MGC pressured Wynn Resorts in 2014 into lowering the value to $35 million. That was the land’s assessed worth if it had been restricted from internet hosting a on line casino.
This was to assuage the regulator’s misplaced issues about Lightbody, argues the lawsuit. It claims the regulator threatened to drawback Wynn’s licensing software if it didn’t comply.
As an alternative of finishing or concluding its investigation of the possession pursuits in FBT, the fee made favorable consideration of the applying topic to reducing the sum of money the house owners of FBT would obtain for the property, thereby giving one personal get together, Wynn, a multimillion-dollar windfall on the expense of one other personal get together, FBT,” wrote Kafker.
“Whether or not the fee directed such a compelled switch of property, or merely accepted it as a treatment to its issues about undisclosed legal possession pursuits at FBT, can’t be determined with out additional discovery,” he added.
