March 10, 2007 — Casino developer Paul Golden must repay his mother more than a half-million dollars in loans and sale proceeds from a restaurant which, she alleged, he obtained fraudulently to pursue business interests on St. Croix.
On March 7, after a civil trial that lasted several weeks, a New Jersey jury ruled in Linda Golden's favor, awarding her the money but ruling that she did not prove the fraud claim.
By its verdict, the jury panel agreed that Linda Golden had "proven by a preponderance of evidence that she had made one or more personal loans to or on behalf of her son, defendant Paul Golden, for which she had not been repaid," according to court documents obtained by the Source.
However, the panel said that she was unable to prove by clear and convincing evidence that Paul Golden had obtained money — that was not specifically loans — from her fraudulently. At issue was whether Golden's use of sale proceeds of a restaurant, which jurors ruled was owned by Linda Golden, constituted fraud.
Golden must pay his mother $390,205.27 for a "personal loan" that she alleged was made to him, and repay $199,080 owed to her by Long Branch Steakhouse and Saloon of Marlboro (LBSSM), N.J., which at one point listed both mother and son as owners.
Attorney Merill O'Brien, representing Linda Golden, said during the trial that Paul Golden used the proceeds from the sale of the restaurant, alternately referred to as Rough Riders, to purchase property on St. Croix. "Long Branch issued a check for $100,000 to the Casino Control Commission on St. Croix," O'Brien said.
According to court documents, Linda Golden proved that she and her son had entered into an agreement listing her as "100-percent owner" of LBSSM, and had attempted to prove that, by using the restaurant's assets, her son had committed fraud. Jurors ruled otherwise.
During the trial, which began last month, O'Brien said Golden used his mother's name in applying for a liquor license for the steakhouse in 1997 and at renewal a year later, in 1998. It was unclear when the restaurant changed ownership — or if it did at all — but in August 2001, Paul golden sold the restaurant without notification to his mother, according to the documents, and at that time simply told her that she was no longer the owner.
Since shortly thereafter, Golden has led a push on St. Croix to build the island's second casino on the south shore. As part of the license application, he has had to undergo — and apparently passed — an exhaustive investigation by the V.I. Casino Control Commission. During the civil trial in New Jersey, Golden admitted under questioning that he had committed perjury in more than one instance — once before an administrative judge, and during depositions leading up to the civil suit filed against him by his mother. He also admitted to answering a question falsely — about whether he previously held a liquor license — on an application from the New Jersey Division of Alcoholic Beverage Control.
Asked whether he told the truth in sworn testimony in August 2000 before Administrative Law Judge Anthony T. Bruno as a witness in an administrative proceeding, Golden replied: "Those statements were untrue at the time."
"These are sworn statements in a court of law. You weren't telling the truth?" he was asked, according to court documents. Golden responded: "No, I was not."
According to the documents, Golden also admitted during the trial last month to providing information on the ABC application when he noted that he did not own a prior liquor license while applying for one for a business identified as a strip club, Virgo's.
Under questioning, Golden said that on the application "the statement was, 'Did I own any other liquor licenses?' I said no. And that was untrue." Neither Paul Golden nor Eileen Petersen, Casino Control Commission chairwoman, could be reached for comment over the weekend. O'Brien did not return calls to his New Jersey office.
Last December, members of the 26th Legislature approved a $15 million bridge loan for Paul Golden at the same time it approved sizable raises for senators and the territory's top two officials. Around the same time, the Casino Commission granted Golden Gaming Resorts its eighth extension on a casino reservation license. (See "Casino Commission Grants Golden Gaming Yet Another Extension.")
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