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11 N.J.A.R. 151

Greate Bay Hotel and Casino, Inc., and Patricia Jean DiGiacomo; Division of Gaming Enforcement v
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Citation: 11 N.J.A.R. 151
Decision Date: 1984
Synopsis: The Division of Gaming Enforcement filed a complaint against respondents alleging several violations of the Casino Control Act and Commission regulations. The matter was transmitted to the Office of Administrative Law for a hearing. The alleged violations occurred during a three-day period when a group from Hong Kong visited respondent casino in order to gamble. The group, which consisted of 32 players and their families, had previously gambled at the Playboy casino. [Another decision involving Elsinore .4ssocs.; Joanne Marie Rogers, et al., is also included in this volume of N.J..4.R.] The group placed several million dollars on deposit with the casino. This transaction took place. in a conference room, rather than at the casino cage. The deposits consisted of 48 checks and currency. Some of the checks, which were not inspected when deposited, were subsequently found to be nonconforming cash equivalents. In addition, because the group pooled funds and re- distributed them according to their own arrangement, the deposit records did not correspond to specific instruments placed on deposit and did not indicate that some of the instruments were cash equivalents. Respondent DiGiacomo was the highest ranking member of casino management present when the deposits were made. The administrative law judge concluded that several violations had occurred. First, respondent violated applicable regulations by accept- ing deposits in a conference room rather than at the cage. In addition, respondent did not properly prepare the safekeeping deposit receipts, failed to verify the validity of checks presented as cash equivalents and accepted some non-conforming instruments as cash equivalents which were not equivalents within the meaning of the regulations. Finally, respondent failed to properly record or report complimentary services when it paid $325,000 to reimburse the Hong Kong group for airfare. The administrative law judge ordered respondent licensee to pay a total of $163,000 in fines. Regarding respondent DiGiacomo, the judge found her lax in performing her responsibilities as cage manager but, because of her inexperience and lack of direction from superiors, ordered a reprimand rather than a fine. Upon review, the Casino Control Commission affirmed the findings of fact and conclusions of law in this initial decision, but modified the decision with regard to the number of violations and the penalties. While the administrative law judge concluded that only one violation occurred when respondent improperly completed 28 deposit forms (the 32 gamblers pooled their funds; the deposit of cash equivalents for the group was not recorded on 28 of the individual deposit forms), the Commission concluded that 28 violations occurred--one for each of the separate accounts. The Commission also increased the penalty assessed for accepting non-conforming instruments as cash equivalents. By accepting those instruments, the licensee essentially 'loaned' the Hong Kong group money with which to gamble, without any of the safeguards attendant to the extension of credit under casino law and Commission regulations. The respondent's actions were purposeful, with knowledge and in total disregard of the regulatory requirements. A monetary penalty of $3,000 per violation was or- dered. Regarding failure to report the complimentary service (reim- bursement of airfare), the administrative law judge had merged the separate requirements for filing reports to the Commission and the Division. The Commission concluded that two separate violations occurred. Moreover, the violations were an affront to the oversight functions of the Commission and the Division. The penalty proposed in the initial decision was doubled to $10,000 for each violation. The. Commission also found that respondent DiGiacomo had shown poor judgment and disregard for regulatory system. Her sanctions were increased to a seven-day suspension and a $500 fine. In conclusion, the Commission said respondent demonstrated a disregard for regulatory controls required by law and instead sought to accommodate the immediate needs of wealthy gaming patrons. State of New Jersey 153 There was also a pattern of concealment of these activities from regulatory authorities, as demonstrated by the failure to properly record and report transactions. To punish the conduct and to deter others from engaging in similar behavior in the future, monetary penalties totalling $212,000 were imposed. In a separate opinion, Commissioners Jacobson and Zeitz said the monetary penalties imposed on respondent would not be a meaningful deterrent but would in effect be considered a cost of doing business. They proposed that the proper penalty would be suspending the casino's certificate of operation for a minimum of 24 hours and requiring respondent to provide training sessions for employees during the suspension, with the training to stress compliance with the Casino Control Act and Commission regulations. Financial penalties alone do not serve as an effective deterrent to continued violations. Only suspension of respondent's operating certificate would provide just punishment and effective deterrence. Kevin F. O'Toole, Deputy Attorney General, for petitioner (Irwin I. Kimmelman, Attorney General of New Jersey, attorney) Leonard C. Horn, Esq., for respondent Greate Bay Hotel and Casino, Inc. (Horn, Kaplan, Goldberg and Gorny, attorneys) Nicholas F. Mole.s, Esq., for respondent DiGiacomo (Wilson, Jacobson, Winkelstein & Scerni, attorneys)
Rule(s) Cited: 19:45-1.1 19:45-1.2(e)3 19:45-1.9(c)1 19:45-1.15(b) 19:45-1.24 19:45-1.25(e) 
Statute(s) Cited: 5:12-99 5:12-101(b) 5:12-102 5:12-129