SunCruz Casinos sale

SunCruz Casinos offered offshore "cruises to nowhere", legally transporting passengers into international waters beyond the reach of federal and state gambling laws. In the 2000s (decade), it became known for the involvement of some high-profile lobbyists such as Jack Abramoff, and the murder of its former owner, Gus Boulis.

Founding and investigation
In 1994 Boulis, already a multi-millionaire by founding the Miami Subs sandwich shop franchise, bought a number of luxury yachts. He remodeled the yachts as casinos, and began to operate his "cruises to nowhere", departing from the Florida coast into international waters. There, out on the sea, passengers would gamble at high stakes on poker, blackjack and slots. Boulis called his fleet of 11 ships the SunCruz Casino line. By the time he entered into negotiations to sell the company in 2000, SunCruz Casinos was earning tens of millions of dollars in annual profits, and employed over 2,000 people.

Florida state officials made several attempts to shut the business down, finally succeeding in 1999 when federal prosecutors charged Boulis with violating shipping laws over the ship's registration. U.S. shipping code forbids foreign nationals from owning American commercial vessels, and Boulis was a Greek citizen. Boulis agreed to pay a $1 million fine, sell the business, and never work in the gaming industry again. So that Boulis would be able to get a fair price when he sold, the deal with the federal prosecutors would be kept a secret until the deal was closed. In January 2000, Boulis went looking for a buyer.

Purchase of SunCruz Casinos and political ties
Boulis' lawyer Art Dimopoulos worked at Preston Gates Ellis & Rouvelas Meeds, a large firm in Seattle, Washington. Dimopoulos was tasked with finding a buyer for SunCruz. Jack Abramoff, a lobbyist then employed at the same firm, heard about the situation. Abramoff told Dimopoulos that he knew buyers who would be interested. They included himself, but ethics rules prohibit the same law firm from representing a buyer and a seller, therefore Abramoff hid his interest in the purchase from his firm.

Abramoff enlisted Adam Kidan and Ben Waldman, acquaintances from his College Republican days as partners in the deal. The price was approximately $145 million; Abramoff and his partners would come up with a $23 million downpayment, and then other financiers would release loans.

Press accounts have suggested that Abramoff used his political connections to gain support for the deal in Washington. Tom DeLay, then House minority whip, gave Boulis a flag that had flown over the Capitol building. Abramoff brought his lead financier in the deal to a fund raiser for DeLay in Abramoff's box at FedExField.

Ohio Republican Representative Bob Ney aided the purchase in the House on several occasions. In March 2000, before the deal was closed, Ney entered comments in the Congressional Record accusing the SunCruz management of cheating passengers.

Rep. Dana Rohrabacher (R-Calif.) was listed as a financial reference for Abramoff in the purchase. He was also quoted in The Washington Post as saying "I don't remember it, but I would certainly have been happy to give him a good recommendation" and "He's a very honest man."

On September 22, 2000, in secret, Abramoff convinced Boulis to accept promissory notes for $20 million in exchange for a secret 10 percent interest in the newly reorganized SunCruz Casinos. The deal was doubly illegal: Abramoff and his partners were violating the terms of their purchase agreement with their financiers which required that they put up $23 million of their own money, and Boulis was violating the terms of his settlement with the government, which required that he separate himself entirely from his company.

The deal was closed on September 27, using false documents that purported to attest that Abramoff and his associates had paid the $23 million. On October 26, 2000, Ney entered comments into the Congressional Record praising the change of ownership. Ney later accused Abramoff of duping him.

Payment dispute and murder
The business relationship soured soon after the fraudulent purchase. Boulis allegedly clashed over the falsified wire transfer with an Abramoff associate. Abramoff was mostly a silent partner, but both he and his partners used SunCruz funds to pay for numerous personal expenses. Boulis also alleged that one of Abramoff's partners had links to organized crime. The relationship between Boulis and Abramoff's partners grew so contentious that he had a fistfight with one of them at a business meeting in December 2000, with both parties allegedly making threats. Boulis was shot to death in Miami two months later in February 2001, in what police called "a gang style hit". A lawsuit brought by Boulis' estate alleges that an Abramoff associate made three payments of $10,000 to Anthony Moscatiello immediately prior to the murder.

Abramoff's partners had hired Anthony Moscatiello as a business advisor, despite Moscatiello's previous indictment as former bookkeeper for the Gambino crime family (led by Mafia crime boss John Gotti), paying him $145,000 through SunCruz for services that were allegedly never rendered. Anthony Ferrari also received $95,000 from SunCruz as payment for security services, in addition to further sums in casino chips.

Moscatiello and Anthony Ferrari were charged with murder, conspiracy and solicitation to commit murder. James Fiorillo was charged with murder and conspiracy. In May 2006, an Abramoff associate told authorities that Moscatiello and Ferrari confided in him that another Gotti associate, John Gurino, killed Boulis. Gurino himself was killed in October 2003. Gurino previously wasn't part of the investigation.

Bankruptcy, investigations and indictments
SunCruz declared bankruptcy in June 2001, and was subsequently auctioned off to new management in a bankruptcy action brought by Foothill Capital. Abramoff signed his stake in SunCruz over to the Boulis family estate, and another associate later turned over his stake for $200,000. Foothill settled with Abramoff for an undisclosed sum, and continued litigation against his partner.

To further support the loan application, both Abramoff and an associate provided personal financial statements. The lenders relied on both financial statements, and the counterfeit copy of the wire funds transfer, deciding to approve and fund the loan. Some of the proceeds of the loan were then wire-transferred to the account of Gus Boulis at Ocean Bank, in Miami, Florida. The copy of the wire funds transfer notification reflecting the transfer of $23 million from the buyers to the seller was fraudulent, as no such transfer of funds ever occurred, and the buyers had never made any cash contributions toward the purchase of SunCruz. Similarly, the personal financial statements provided to Foothill by Abramoff and his associates contained false information concerning their respective assets and liabilities.

On January 4, 2006, Abramoff pleaded guilty to conspiring to commit wire fraud and mail fraud, and of a separate charge of wire fraud, relating to the SunCruz purchase. On March 29, 2006, Abramoff and one of his partners were sentenced to five years and ten months in prison -— the minimum allowed per the plea bargain -— and were ordered to pay restitution of more than $21 million for their involvement in the SunCruz casino deal.

Connections to Congressman Bob Ney
According to The Washington Post, Bob Ney came under investigation by prosecutors for his role in aiding the purchase, and was implicated in Abramoff's plea agreement. (In a separate Indian lobbying case, Abramoff pleaded guilty to charges including bribing a Congressman who was later identified as Ney.)

In March 2000, before a deal for Abramoff and others to purchase SunCruz was closed, Ney entered comments in the Congressional Record that were critical of the management of SunCruz: "Mr. Speaker, how SunCruz Casinos and Gus Boulis conduct themselves with regard to Florida laws is very unnerving. Florida authorities have repeatedly reprimanded SunCruz Casinos and its owner Gus Boulis for taking illegal bets, not paying their customers properly and had to take steps to prevent SunCruz from conducting operations altogether." It is alleged that this statement was intended to pressure SunCruz to sell to Abramoff on terms favorable to the latter.

It is alleged that Ney, like other Republicans in the House, was under pressure to raise money for the Republican National Congressional Committee (RNCC) in October 2000, a month prior to the November elections. In an October 23 e-mail from Abramoff to business partner Michael Scanlon, Abramoff asked "Would 10K for NRCC from Suncruz for Ney help?" Scanlon replied, "Yes, a lot! But would have to give them a definite answer--and they need it this week..."

The $10,000 was sent to the RNCC within days, and Ney got credit for raising it. Scanlon wrote a draft statement for Ney that Adam Kidan, the main partner of Abramoff in purchasing SunCruz. Ney then inserted the statement into the October 26 Congressional Record.