Divi Casino Pays Disputed Late Fees Under Threat of Closure

A gaming enforcement officer appeared at the Divi Carina Casino Wednesday to “coordinate the process for closing the casino tomorrow.” He presented a copy of a letter from the acting attorney general demanding back taxes of almost $1.5 million. According to the casino’s attorney, the company heard of the alleged taxes for the first time the previous day in a news story.

Scott Redman, attorney for casino management company Treasure Bay VI, told the Source that although the letter handed to a casino manager by the gaming officer was dated Oct. 9 and purportedly was delivered by hand and electronically, Anton Kuipers, casino general manager, searched the company’s server without finding the emailed version and will swear, if necessary, that the letter was not hand delivered. In fact, Redman said, the only copy of the Oct. 9 letter received by TBVI was postmarked Oct. 13 and delivered by the U.S. Post Office on Wednesday, Oct. 14. [Letter to Divi from AG]

When contacted, Kuipers referred the Source to Redman.

According to Redman, the letter said the AG had “examined the information” from the Casino Control Commission and “concluded” the amount owed was correct. The total amount demanded was $1,451,262 — $435,000 for casino license fees, $275,568 for the V.I. Revolving Fund, $316,043 in revenue from the casino and racetrack, and $425,991 in interest on alternative investment tax.

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“The issue with the number (past due fees) has never been taken up by the Casino Control Commission. We’ve had no due process or following the procedure of the Casino Control Act,” Redman said.

In a meeting Thursday with Attorney General Claude Walker, TBVI pointed out that the Revolving Fund revenues, the gaming revenue and interest amounts were owed to the Casino Control Commission by the V.I. government through the Finance Department. As far as the licensing fees, Divi Casino had paid the full amount on every invoice received, Redman said. [Response to the AG]

Initially, Walker demanded the full amount from TBVI, Redman said, and “the threat of closure was very real.” Eventually, he accepted a check for $473,350 to cover license fees for the casino and employees. Walker and Casino Control Commission members Roderick Moorehead and Henry Richardson, who also were present, did not acknowledge whether or not the numbers were wrong, the attorney said. [Treasure Bay press release on payment]

Multiple calls to Walker for clarification were not returned.

The third commission member and chairwoman, Violet Anne Golden, was at a conference in Peru and unavailable to talk, according to CCC Executive Director Malcolm McGregor.

Golden talked about uncollected fees during a Senate hearing in June and again during an Oct. 9 Casino Control Commission meeting. She did not mention a bill for almost $1.5 million was being sent to TBVI even though casino management attended that meeting.

Several times during the CCC meeting, Golden admitted the commission did not charge the legally allowable licensing fees to the casino or employees over the years.

One purpose for that meeting was to propose amendments to an increase in fees to the highest allowable rates. Susan Varnes, of TBVI, said at the time that it would double the cost of a license for the company and the 222 employees. Vendors dealing with the casino also will pay more for their licenses if the amendments are approved at the next CCC meeting.

Speaking to the Legislature, Golden said at least $1.3 million in unpaid fees were discovered during a CCC forensic audit ordered because there was a dispute with Finance over the balance in the Casino Revenue Fund. At that time, Golden said the audit report was not complete.

Redman contends TBVI has paid all its fees over the years, as invoiced, including half of the employees’ licensing fees. Golden’s contention that the renewal fees were improperly set indicates that former directors for the commission were not authorized to set fees, he said.

“Our position is that those fees were properly charged and paid. This is what the Casino Control Commission has approved year after year, after year,” Redman said. “Judge Petersen (former chairwoman) didn’t have the power to set fees but she (Golden) has this power?”

The Casino Control Commission accepted “these fees time and time again” without question with Golden serving as a commission member since 2009.

Employees pay the other half of the fees upon receipt of their licenses. Redman said licensing by the V.I. government and the CCC is a very slow process.

In Thursday’s payment to the commission, Redman said the company paid more than $38,000 to cover employee licenses being processed, but that as far as they know, their payments have been accurate. The attorney general seemed satisfied, he said, and now TBVI will work with the CCC to “see if any of this is valid.” The company will dispute the numbers and go to court if necessary, he added.

“If Petersen lacked the authority to set the fees then Anne Golden doesn’t have the authority to unset that fee. She has to have the whole commission say that,” he said.

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