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 Casino Supplier Says Okay Pueblo Violated Rico Act

By Glenn May
SUN Staff Writer
The supplier of 480 slot machines to San Juan Pueblo's Ohkay Casino alleges that pueblo officials engaged in extortion, racketeering and mail and wire fraud to take possession of the machines.
James Gallegos, of Games Best Enterprises, charges in a federal lawsuit filed March 25 that say Corporation, which now runs the casino, and various tribal officials, violated federal Racketeer Influenced and Corrupt Organization Act (RICO) statutes while trying to take take ownership of his machines.
"Our sense is they took the machines without compensation and they did it by using fraudulent means, threats accusations and so forth," said James Toulouse, Gallegos' lawyer.
Named in the suit are tribal officials including Gov. Joe Garcia, former Gov. Earl Salazar, Tribal Judge Stanley Bird and seven other tribal officials.
The suit centers on actions allegedly taken by the tribal council in early 1996 after the tribe and Gallegos signed a new contract reducing Gallegos' take from 40 percent of gambling profits to 30 percent. The contract was to run until this July.
The suit states that the tribe was still unhappy with the size of Gallegos' share and that the tribe made several efforts to take control of the slot machines.
In December 1995, it claims, Tribal Councilor Wilfred Garcia insisted that Mr. Gallegos give the machines to the board in a gentlemen's agreement" and that the machines would later be returned.
Joe Garcia, then a tribal member and now governor of the pueblo, allegedly told Gallegos at a February 1996 tribal council meeting that the board running the casino "was having financial trouble and that they needed to divorce themselves from Mr. Gallegos."
This was despite, the suit says, daily casino income of $50,000 to $70,000.
At another February 1996 meeting, Gallegos contends, then-Gov. Earl Salazar commented that Gallegos had already been paid $5 million under the contract "and that the machines were paid for and thus belonged to the tribe."
It charges that Salazar told Gallegos "in an aggressive and threatening manner" that the tribe "would get the machines and Garcia "told Mr. Gallegos that the board would make it impossible for Mr. Gallegos to get his machines back."
At the same meeting, Garcia allegedly told Gallegos that "the board had never asked Mr. Gallegos to provide the machines for use at the Ohkay Casino" the suit claims.
Salazar told the SUN that any comment on the case would have to come from the office of Gov. Garcia. Garcia is reportedly out of town until Thursday and could not be reached for comment.
According to the suit the casino's governing board now tells its employees that it has bought the machines.
The casino severed its relationship with Gallegos in April 1996, and has since refused to give him back his machines. The suit says that the tribe has paid Gallegos no rent since Jan. 29, 1996, leaving Gallegos to pay $2.5 million he says he then still owed to his machine provider, Bally Gaming Inc.
It also charges that Gallegos couldn't even track how much the casino was making, and how much he is owed, because tribal officials banned Gallegos and his employees from casino counting rooms.
It further alleges that the pueblo skimmed 25 percent of the profits and kept the money for use by the pueblo.
"That would indicate the tribe was taking 25 percent of the money to invest in its business community and in its other business affairs," Toulouse said. "It doesn't mean the money was going into anybody's pocket."
The suit claims that Gallegos bought a $200,000 profit accounting system, which the tribe has still not installed, so income could be monitored.
Judge Bird is also alleged to have issued subpoenas for several of Gallegos' employees who were tribal members "in order to compel them to go back to work."
Since the tribe evicted Gallegos, the dispute has bounced between federal and state courts.
The tribe has tried on several occasions to bring the matter before tribal or federal courts because it claims that the original contract with Gallegos was void because it was never approved by federal authorities.
Gallegos' efforts, until now, have focused on getting his machines back.
But charging tribe of facials under RICO statues represents a serious escalation in the battle. RICO laws state that damages awarded to plaintiffs are automatically tripled.
The suit is not specific listing the racketeering claims, however.
It states that "through numerous telephone calls, letters sent via U.S. Mail and facsimile transmissions," the tribe has en- gagged in mail and wire fraud, and "extortion and interference with commerce by threats."
Toulouse said the threats have been limited to financial threats.
"Their racketeering activity is pervasive and constitutes a pattern of racketeering as defined under" federal law, his suit adds.
Toulouse estimated it would take one or two years for the case to get to trial.

Rio Grande Sun p.1
Espanola, New Mexico 87532
Thursday, April 10, 1997