What did Wynn Resorts know and when did it know it?
Witnesses in fraud case contradict each other
THE QUESTION OF WHEN WYNN RESORTS learned of convicted felon Charles Lightbody’s involvement in the casino company’s Everett land deal became harder to answer on Wednesday when witnesses in a federal wire fraud case began to contradict each other.
Wynn officials have testified they had no knowledge of Lightbody until July 2013, when investigators from the Massachusetts Gaming Commission flew to Las Vegas and asked them what they knew about him.
James Flood, a low-level employee at the real estate company at the center of the Everett land deal, testified on Tuesday that his boss and long-time friend, Dustin DeNunzio, told two high-ranking Wynn officials about Lightbody in November 2012. He told a similar story before a grand jury in 2014, despite pressure from federal prosecutors. Defense attorneys noted that Flood has an agreement with prosecutors requiring him to tell the truth in court or face prosecution. Prosecutors haven’t charged Flood with perjury.
On Wednesday, federal prosecutors played the tape of a State Police interview with DeNunzio in which he contradicted Flood, his former employee. DeNunzio said on the tape he did not mention Lightbody to Wynn officials in November 2012, but assumed his attorney had informed lawyers working for Wynn of Lightbody’s involvement. “Our attorney would have handled everything,” he said. “We weren’t going to start taking payments from Wynn and not disclose everything.”
For example, defense attorneys zeroed in on a June 18, 2013, email from DeNunzio to John Tocco, a Wynn Resorts employee. In the email, DeNunzio introduced Tocco to Lightbody and suggested Lightbody could assist Wynn in get-out-the-vote efforts for a referendum in Everett on the casino project. The implication was clear. If DeNunzio was trying to conceal Lightbody’s involvement from Wynn officials, it made little sense to introduce him to Wynn officials. Tocco is the son of Stephen Tocco, the president of ML Strategies, the lobbying firm representing Wynn Resorts.
During testimony on Wednesday, prosecutors played tapes of State Police interviews with DeNunzio, Gattineri, and Lightbody and dug into details of Lightbody’s financial role in FBT Everett, the limited liability company that owned 35 acres in Everett. Wynn Resorts originally bought the land for $75 million, but later scaled the amount down to $35 million.
According to the testimony, Gattineri, Paul Lohnes, and Gary DeCicco were the original investors in FBT Everett, buying the land for roughly $8 million in 2009. On the day the land purchase closed, witnesses testified that DeCicco, who had a criminal record, couldn’t come up with his share of the money. With Lohnes about to lose his $1 million deposit on the property, Lohnes kicked in an additional $3 million, Gattineri ponied up $3 million, and Lightbody gave DeCicco about $1 million.
Witnesses said Gattineri subsequently foreclosed on DeCicco’s share of FBT Everett and then signed a promissory note to buy out Lightbody. According to the taped interviews of Gattineri and Lightbody, the five-year promissory note committed Gatinerri to pay Lightbody $1.7 million plus interest. Gattineri ultimately paid Lightbody a total of $1.9 million in June 2014, according to testimony.
The timing of the promissory note is a bit unclear. Several witnesses testified the terms were negotiated on Aug. 15, 2012, but not put in writing until the summer of 2013. The timing is important because Wynn officials came on the scene in November 2012. Witnesses have also testified that the promissory note was signed by Gattineri and Lightbody during the summer of 2013 but then reissued and resigned.
Unbeknownst to FBT Everett, law enforcement officials began investigating the company in 2013 after listening to tapes of calls between Lightbody and Darin Bufalino, an inmate at a state prison in Shirley who had ties to organized crime. On the calls, Lightbody boasted about his involvement with the casino deal and the payday coming his way.
Lt. Kevin Condon, a State Police official assigned to the Massachusetts Gaming Commission, testified on Wednesday that Lightbody’s involvement with Bufalino concerned him because of Bufalino’s ties to organized crime. He said the prison tapes also led him to believe that Lightbody had an undisclosed interest in FBT.
Condon interviewed DeNunzio on July 9, 2013, and never mentioned Lightbody because he wanted to see if DeNunzio would talk about him without prompting. DeNunzio never disclosed Lightbody’s involvement, but the very next day, at the urging of FBT Everett’s attorney Paul Feldman, DeNunzio called Condon and told him about Lightbody. Condon conducted a second interview with DeNunzio later that day during which DeNunzio talked at length about FBT Everett. However, he did not mention that the promissory note from Gattineri to Lightbody had been signed the day before.
Condon interviewed Lightbody on July 12, 2013, and asked him if he had signed any new promissory notes or any type of document connected with FBT in the last year. Although Lightbody had signed the promissory note earlier that month, he answered no.“You’re sure about that?” Condon asked.
“Yeah,” Lightbody responded.