Wynn security chief spied on boss’s ex-wife

Commission looks into surveillance of Elaine Wynn

ONLY A SELECT group associated with Wynn Resorts knew the company’s security chief had put the founder’s ex-wife and his former business partner under surveillance, James Stern told gambling regulators.

Stern, a former FBI agent who has worked for the international casino company for a dozen years, said he surveilled Elaine Wynn when she was in the company of Kazuo Okada because of the Japanese gambling mogul’s alleged connection with organized crime.

“Okada had ties to Japanese organized crime, and when he flew in I wanted to make sure he wasn’t meeting with any nefarious people, and so when they were together, they were followed,” Stern told the Massachusetts Gaming Commission.

After the publication of this story, a spokeswoman for Elaine Wynn sent an email that said, “Elaine Wynn has never met with Okada. We are very confused by the testimony today.”

The commission opened an adjudicatory hearing Tuesday to look into whether officials at Wynn Resorts should still be deemed suitable to hold a casino license. The company’s suitability was thrown into question because of revelations that came to light through a January 2018 Wall Street Journal article documenting multiple allegations of sexual harassment and worse against Steve Wynn, who was then chairman and CEO of the company. The commission’s decision will determine whether the company can open its $2.6 billion Everett casino in June as planned.

Much of the testimony has focused on what company executives knew of the allegations and of Steve Wynn’s practice of buying the silence of his accusers. The company claims that no one who was aware of sexual assault allegations against the company founder and did not investigate or report those allegations still works for Wynn Resorts. On Thursday, commissioners heard about covert operations conducted by Wynn’s chief of corporate security and investigations.

Elaine Wynn, a part-owner of the company, testified before Stern spoke to commissioners and said she had some inklings that she was under surveillance.

“I think somebody suggested that maybe I was being surveilled, and I found that quite difficult to believe,” Elaine Wynn said. “It wasn’t until this morning that I learned that perhaps that was accurate.”

Stern said that Kim Sinatra, who was Wynn Resorts general counsel until last year, and other outside lawyers were the only people he advised about the surveillance on Okada and Elaine Wynn.

Earlier in the day, Matt Maddox, who had helped Steve Wynn lead the company and took over as CEO after he resigned, said he would be surprised to learn the Elaine Wynn was under surveillance. Stern’s testimony corroborated that Maddox was in the dark about that.

“Was Mr. Maddox involved?” asked Cathy Judd-Stein, the chairwoman of the commission.

“No. I didn’t talk to Mr. Maddox about this type of stuff,” Stern replied. He also said he didn’t think Steve Wynn knew about it.

Maddox was looped in on another operation that Stern now believes was misguided. After the Wall Street Journal article, Stern sent someone undercover to get a haircut at a salon to gather intel on Jorgen Nielsen, a former Wynn employee who was a named source in the article.

Stern said he was concerned that Nielsen might have been involved in a data breach, but there was no direct evidence of that. On the advice of another Wynn Resorts official, Stern also surveilled three Wynn employees both on and off the job, he acknowledged Thursday.

The investigations that Stern described Thursday stand in contrast to the lack of serious inquiry into accusations against Steve Wynn by anyone at the company before the Wall Street Journal article.

Elaine Wynn claims she first learned of a rape allegation against Steve Wynn when she was divorcing him for the second time in 2009, and she told multiple officials within the company at that time, including Sinatra – who denies that. Elaine Wynn believed that those officials would handle the matter appropriately. She said she also told someone who had recently joined the board in 2009, but that man was not named in Thursday’s hearing.

Years later, as Elaine Wynn asked questions to Wynn Resorts officials about allegations against her former husband, she said she began to lose confidence in the way Sinatra and others had handled the matter.

“I did not feel that I was given answers in a cooperative fashion. I started to sense that there was a bit of a change in tone and mood in the board, and I believe I was being referred to as a bitter, cynical ex-wife,” Elaine Wynn said.

Ultimately, Elaine Wynn lost her seat on the board. Legal action Elaine Wynn took associated with litigation that pitted Okada against Wynn Resorts wound up bringing some information about the allegations to the attention of the entire Wynn Resorts board. But at the time, the board members were convinced the accusations were merely a legal maneuver by Elaine Wynn.

Maddox and others have claimed that they did not believe the allegations against Steve Wynn because of the acrimony between the casino mogul and his ex-wife.