Officials raided facility, found the property couldn’t cover chips in play
Chris Moyer, deputy communications director for the state Attorney General in Los Angeles, told the Fresno Bee the raid came along with an immediate closing of the casino.
“We served an emergency closure order today. We cannot comment further at this time.”
The raid stemmed from a complaint that the owners of the card club had not properly reported and disclosed financial loans. Moreover, the alleged lenders in these situations did not have proper licensing and paperwork.
When authorities raided 500 Club, they discovered another big issue. The card room had more chips in use than documented funds. Once the DOJ discovered the chip problem, it immediately issued an emergency closure of 500 Club.
The card room’s general manger, Dusten Perry, says the chip issue is a misunderstanding. As Perry explained to The Business Journal, the card room has bond insurance that covers any shortfall of cash when it comes to chips-in-use. Perry also conceded that he is not sure if the Attorney General’s office believes there is no bond insurance or if the bond insurance the card room holds is insufficient in their eyes.
The state also is not keen on relying on bonds to cover chips, so that could contribute to the concerns.
500 Club allegedly has a history with bad record keeping
As the Bee reports, 500 Club failed to provide complete records to the Gambling Control Bureau despite the bureau requesting them on multiple occasions. Addressing this apparent lack of bookeeping is a condition to meet before the club reopens.
The 500 Club has to address several pages worth of conditions before it can open back up. One condition is to produce the requested banking paperwork. Another is to hire an independent, state-approved manager to oversee the club’s accounting.
The chip issue led to the room’s closure, however the loan issue is outstanding still as well. The complaint alleges the card room’s former attorney, John Cardot, issued a seven-figure loan to the card room. That money was supposedly used to help build the club’s newest location. In exchange for the loan, Cardot allegedly got an ownership stake in 500 Club.
The issue at hand is that the club failed to file paperwork divulging Cardot’s financial interest. That will need to be addressed as one of the conditions to reopen as well.
The 500 Club is not the only card room with issues this year. In the spring, the Feds raided The Bicycle Casino for suspicions of money laundering. The property reopened a few hours after the raid.