Wynn land case defendants found not guilty
Big defeat for feds; questions raised about Gaming Commission
A FEDERAL JURY took less than a day to return not guilty verdicts for three men accused of concealing a convicted felon’s ownership stake in a 35-acre parcel of Everett land acquired by Wynn Resorts for a $2 billion hotel and casino project.
Charles Lightbody, Anthony Gattineri, and Dustin DeNunzio on Friday were each found not guilty of wire fraud and conspiracy to commit wire fraud. After the verdicts were announced, DeNunzio’s family broke out in cheers and Gattineri tearfully hugged his lawyer. Lightbody, whose criminal history and expletive-laden taped phone calls played key roles in the case, showed no outward emotion.
The decision was a huge loss for the federal government, which devoted enormous resources to investigating and prosecuting the case. The verdict also raised questions about actions taken by Wynn Resorts and the Massachusetts Gaming Commission, as well as their decision to reduce the land sale price from $75 million to $35 million because of concerns about a convicted felon’s hidden involvement.
Ken Leonetti, an attorney at Foley Hoag who is representing Mohegan Sun in a lawsuit against the Gaming Commission for its award of a casino license to Wynn, issued a statement saying “this trial and the verdict delivered today raise immediate and important questions about the Gaming Commission’s process, and whether the MGC’s suitability review of Wynn was thorough and its findings accurate.”
The property in Everett, a polluted stretch of land on the Mystic River once owned by Monsanto Corp., was purchased in 2009 for $8 million by a limited liability company called FBT Everett. The names of FBT’s owners were not disclosed publicly, but court testimony indicated the original owners were Paul Lohnes, Gary DeCicco, and Gattineri. When DeCicco couldn’t come up with his share of the purchase price, Gattineri and Lightbody essentially bought him out. Lightbody chipped in $1 million and, in return, received a 12.05 percent stake in FBT .
After state lawmakers approved gaming legislation in 2011, casino operators began to eye the Everett property. First came the Hard Rock Café, which passed on a deal, and then Wynn Resorts, which pursued the land aggressively in December 2012. A call from a reporter about DeCicco, who also had a criminal past, made the owners of FBT nervous that a convicted felon’s involvement could derail any deal.
At about the same time, investigators learned about taped phone calls between Lightbody and his wise-guy buddy Darin Bufalino, who had ties to organized crime and was serving time at a state prison in Shirley. On the calls, with F-bombs flying, Lightbody boasted about his involvement in the casino land deal and promised Bufalino that he would “double-blind” and “triple-blind” his interest. Many of the calls were played during the trial, complete with periodic interruptions that the call was being recorded.
The FBI, concerned that Lightbody’s involvement in the deal might signal organized crime’s interest in the nascent gambling business in Massachusetts, pulled out all the stops in its investigation. Close to 20 agents were assigned at various times to the case. Phone, email, and text records were subpoenaed Phone calls were tapped. Suspects were followed.
Even as law enforcement officials circled, FBT’s owners took steps to remove Lightbody. Gattineri agreed to buy out Lightbody’s stake with a $1.7 million, five-year promissory note. The note wasn’t signed by Gattineri and Lightbody until the end of January 2013, but it carried an effective date of Dec. 14, 2012, five days before Wynn Resorts signed an option agreement to purchase the Everett land.
The key fraud in the case was allegedly committed in mid-January 2013, when DeNunzio told officials at Wynn Resorts in an email that the owners of FBT were Lohnes, Gattineri, and himself. He did not mention Lightbody. Defense attorneys said DeNunzio excluded Lightbody because he was relying on the Dec. 14 effective date on the promissory note.
But federal prosecutors were convinced that Lightbody, sensing a $9 million payday (12 percent of Wynn’s $75 million offer), would not exit the deal for a mere $1.7 million. Evidence presented at the trial also suggested he remained loosely involved with FBT after he was bought out.
The jury apparently believed Lightbody was out.
The government produced no evidence indicating Lightbody and Gattineri had some side deal to the promissory note; in fact, some of the taped phone calls suggested Lightbody and Gattineri didn’t get along, with Lightbody telling a friend on one call that Gattineri was a “nut,” a “scumbag,” a “maggot,” and “a piece of shit.”
Defense attorneys also showed that FBT relied on the advice of its attorney, Paul Feldman, who testified that he told a Wynn Resorts attorney from Mintz Levin Cohn Ferris Glovsky and Popeo about the involvement of a person with a “troubled past.” Feldman also counseled DeNunzio to tell investigators for the Gaming Commission about Lightbody in July 2013.
Feldman’s testimony was very unusual because it came via tape. Feldman testified before a grand jury in 2014 under a grant of immunity. When the US Attorney’s office declined to give him immunity for the trial, Feldman indicated he would exercise his Fifth Amendment rights and refuse to testify. In a highly unusual move, defense attorneys won approval to play his grand jury testimony at the trial. Essentially, the defense attorneys used a grand jury interview conducted by Barclay, the federal prosecutor, to fend off the charges being brought by Barclay.
The outcome of the trial also has ramifications for the Gaming Commission and Wynn Resorts. Wynn Resorts officials insisted they didn’t learn of Lightbody’s involvement until July 2013, when they were told about him by investigators from the Gaming Commission. Yet several witnesses testified at trial that either Wynn Resorts officials or their representatives learned of Lightbody’s involvement much earlier, although none of the instances was conclusive.
Once the controversy over the land erupted in the fall of 2013, the Gaming Commission and Wynn Resorts decided to deal with the situation by eliminating the “casino premium” on the land, cutting the price from $75 million to $35 million. The verdict suggests that price reduction may have been unwarranted.
Officials from the Gaming Commission and Wynn Resorts declined comment. So did Bruce Singal, the attorney representing Feldman.As Lightbody was leaving the courtroom, he was asked if he would ever talk on a phone again if he knew the call was being recorded. He said nothing.
To read CommonWealth’s complete coverage of the trial, click here.