THE THREE DEFENDANTS in the Wynn Resorts land fraud trial rested their case on Wednesday after calling just one witness and playing an audio tape of the grand jury testimony of a prominent Boston real estate attorney who represented them in a number of transactions.
Federal prosecutors allege Dustin DeNunzio of Cambridge, Anthony Gattineri of Winchester, and Charles Lightbody of Revere engaged in wire fraud by concealing the ownership stake of Lightbody, a convicted felon, in FBT Everett, a limited liability corporation that sold 35 acres of land in Everett to Wynn Resorts for a hotel and casino.
The testimony of FBT’s attorney, Paul Feldman, a partner at Davis Malm & D’Agostine, was highly unusual because he didn’t testify in person. Instead, defense attorneys played a tape of his grand jury testimony from Sept. 17, 2014, in which he testified under oath that he informed an attorney working for Wynn Resorts about Lightbody’s involvement with FBT. He also confirmed but minimized the backdating of documents memorializing a buyout of Lightbody’s ownership stake in the land prior to the Wynn Resorts deal.
Feldman’s testimony helped the defendants because it suggested FBT wasn’t trying to conceal the involvement of Lightbody in the land deal. At the same time, however, Feldman confirmed a key prosecution theme, that the defendants backdated documents to make it appear Lightbody was out of the deal earlier than he actually was.
Feldman received immunity to testify before the grand jury but that immunity was not extended to the trial. Since it was expected Feldman would likely invoke his Fifth Amendment rights if called to testify, defense attorneys opted for a replay of his grand jury testimony. Defense attorneys on Wednesday seemed pleased with the outcome.
What made the situation even more bizarre was the fact that Feldman was interviewed in front of the grand jury by Assistant US Attorney Kristina Barclay, who is leading the prosecution of DeNunzio, Gattineri, and Lightbody. In effect, the defendants enlisted the help of the prosecutor in making their defense.
Feldman was the principal lawyer for FBT Everett. In that capacity, he drafted an agreement giving Wynn Resorts an option to purchase the Everett land for $75 million, crafted the promissory note used by Gattineri to purchase Lightbody’s ownership stake in the property, and offered legal advice to FBT on a number of matters. Wynn later renegotiated the sale price to $35 million to eliminate exorbitant profits form the so-called “casino premium” after the state Gaming Commission expressed concerns over Lightbody’s involvement.
On the tape, Feldman and Barclay go over the fallout of a press inquiry to FBT in December 2012 about Gary DeCicco, a former owner who had a criminal record. No law prevents a convicted felon from selling land to a casino operator, but the press query apparently spooked everyone at FBT into thinking it could be perceived as a problem by the Massachusetts Gaming Commission.
At some point in the early part of December, Feldman said DeNunzio told him Lightbody was going to be removed from the ownership group. “Charlie has some problems, and he’s going to be out of this deal,” Feldman quoted DeNunzio as saying.
Barclay asked Feldman what DeNunzio told him about Lightbody’s problems. “He didn’t elaborate. I didn’t follow up,” Feldman said.
Feldman said DeNunzio also told him he needed to inform Wynn Resorts about Lightbody, so Feldman called Daniel Gaquin, a real estate attorney at Mintz Levin Cohn Ferris Glovsky and Popeo, who was working for Wynn. During a lengthy conversation about the Everett land option agreement he and Gaquin were negotiating, Feldman said he told Gaquin about how Lightbody was getting out of FBT because of “some problems in his past.”
Feldman said he remembered discussing with Gaquin whether Lightbody’s involvement and the transfer of his ownership stake to Gattineri would cause any problems for Wynn Resorts with the Massachusetts Gaming Commission. Feldman said he and Gaquin didn’t think it would.
Asked if he specifically mentioned Lightbody’s name during his conversation with Gaquin, Feldman said: “I can’t specifically recall. I think I did.”
Feldman said he isn’t sure whether he mentioned Lightbody’s name because Gaquin subsequently told him he remembered their conversation about a second owner with issues but couldn’t recall being told his name.
Earlier in the trial, Gaquin testified that he couldn’t recall being told about Lightbody’s involvement but conceded it was possible he was told.
Feldman said he reached out to Lightbody to verify he was transferring his interest in FTB to Gattineri and said Lightbody confirmed he would go along with the buyout, saying he wouldn’t stand in the way of a casino transaction. Feldman said he asked Lightbody why he needed to get out. “He said to me when he was much younger he did stupid things,” Feldman said.
Lightbody has a lengthy criminal record, including assault and battery on a police officer and identity theft. None of his offenses resulted in lengthy prison stays.
Feldman told the grand jury he didn’t finish preparing Gattineri’s promissory note for $1.7 million plus interest to Lightbody until late January 2013, but made its effective date Dec. 14, 2012, five days before Wynn and FBT signed their option agreement on the Everett land. Feldman said it was no big deal to backdate the agreement because 99 percent of the work was done in December.
The timing is important because DeNunzio sent Wynn officials an email in January indicating the sole owners of the property were Gattineri, DeNunzio, and Paul Lohnes. Lohnes, the majority owner, hasn’t been charged with fraud and hasn’t testified at the trial.
In July 2013, while he was vacationing on the Cape, Feldman said DeNunzio called him to say he had been interviewed by investigators working for the Gaming Commission. Feldman said DeNunzio told him he hadn’t told the investigators anything about Lightbody because they hadn’t asked any questions that required him to disclose his involvement. Feldman said he told DeNunzio he was being “too precise,” and urged him to call the investigators back and tell them about Lightbody. Feldman said he also informed Gaquin of the situation.
At about the same time, Feldman said DeNunzio called him to say he thought the promissory note from Gattineri to Lightbody should be backdated to August 2012 because that’s when the agreement was originally negotiated. The new promissory note was signed, and then reissued and resigned when Feldman noticed an archival number stamped on the document hadn’t been changed.
Feldman said he saw no problem with changing the effective date of the promissory note to August 2012 if the parties felt a deal was actually reached in August 2012. “To me, it’s not a material thing,” he said.