Crime Is the Down Card in Casino Debate : Gambling: City Council members and law enforcement officials must decide if concerns over illegal activity are sufficient to keep Oxnard from getting new source of revenue.

Once the prospect of big-time gambling in Ventura County would have drawn a solid wall of opposition from local police. But with each city now scraping for every new tax dollar, the law enforcement community no longer speaks with a single voice about plans to build a casino in Oxnard.

The county’s top prosecutor condemns casinos as breeding grounds for crime. But the county sheriff says he recognizes the need to examine every possible tax source for local government, including a tightly monitored casino.

Similarly, Oxnard’s new top cop and his longtime predecessor don’t see eye to eye on the issue.

The current Oxnard chief says casino-related crime hasn’t been much of a problem in Southern California, and states his neutrality on the proposed casino.

But the ex-chief insists big-time gambling would place Oxnard on a slippery moral slope because officials would have approved the “looseness of integrity” that defines casinos and the people who are habitually drawn to them.

“Years ago, before cities were so hard pressed for money, we would have all taken a position in opposition to gambling institutions, but it would have been a moralistic judgment (based on) the intrusion of bad elements,” former Oxnard Police Chief Robert P. Owens said.

Today, he said, police are struggling to keep their departments afloat, so they offer what information crime statistics can reveal about gambling clubs, and leave the moral judgments to the politicians.

The Oxnard City Council is expected to make its judgment soon, after a June 8 meeting on the gambling issue. Of its five members, two have stated positions: Mayor Manuel Lopez flatly opposes gambling, while Councilman Michael Plisky favors it if the city can limit approval to a single casino.

So far, three different promoters have said they want to build casinos in Oxnard.

And gambling sources say that card club bosses in Los Angeles County--where the take per table can reach $600,000 an hour, exceeding even that of Las Vegas casinos--are poised to enter the untapped Ventura County market, drawing customers from the 2.45 million people who live here, in Santa Barbara and in the San Fernando Valley. The closest large casino to Oxnard is 70 miles away in eastern Los Angeles County.

Such prospects raise basic questions beyond musings about right and wrong. Foremost on the minds of Oxnard city officials is whether large gambling clubs would bring crime with them.

Several Ventura County law enforcement officials think they will. But some say that the impact may be minimal if casinos are closely scrutinized, and that financial rewards may be worth the small extra risk.

Crime is likely to go up, police say, because lots of people with lots of money would be at one location, increasing opportunities for thefts, robberies and prostitution.

The fast flow of cash across gaming tables also produces the chance for dirty money to wash itself clean when chips are cashed in at a casino cage, say detectives who specialize in gambling investigations.

In recent years, Los Angeles County’s large card clubs--the biggest in the state--also have drawn organized crime activity, including hidden-ownership schemes that have corrupted public officials and sent them to prison.

One casino--in the city of Bell--went bankrupt after investigators documented its money skimming in 1988, then closed last year after a new owner fled the country while under state investigation.

Another casino--in Bell Gardens--is the focus of a local-federal investigation into loan-sharking and extortion by Asian gangs. And it was fined $4.6 million by the IRS in 1992 for failing to report large cash transactions in violation of a law designed to prevent the laundering of illicit funds.

A third casino--in the City of Commerce--is also being investigated by the IRS and has been fined at least $3 million for failing to document large cash transactions, according to gambling and law enforcement sources.

“Opening the door to casino gambling in our community would invite additional criminal activity,” said Ventura County Dist. Atty. Michael D. Bradbury, who is investigating Oxnard’s casino applicants and crime problems related to casinos.

“I’m not trying to be the moral policeman for Oxnard,” Bradbury said. “But from an historical perspective, it’s just a breeding ground for crime. And that’s the last thing we need in Ventura County.”

Evidence also exists, however, that suggests gambling clubs prompt less crime than might be expected, considering the numbers of people they draw--thousands a night at the largest casinos.

Oxnard Police Chief Harold Hurtt said his department checked with police in the Los Angeles County cities with large casinos--Gardena, City of Commerce, Bell Gardens and Bell--and was told that casino crime is not a problem.

“The information we received was that there wasn’t any significant impact on crime as it is directly associated with the card clubs,” said Hurtt, who plans a more extensive check if Oxnard decides to allow a casino.

Two Southern California political scientists--one a consultant for a casino proposal in Orange County--also have found that the crime rates in five Los Angeles County cities did not increase as the large casinos opened during the last decade. Nor was there an upward crime spiral in surrounding cities.

The political scientists said their survey of finance and law enforcement officials in the five cities showed that, given a choice, the cities all preferred casinos over shopping centers and auto malls as a revenue source.

City of Commerce City Administrator Louis Shepard said in an interview that his town has more crime at its shopping center than at its casino, which employs 2,000 people and paid $10.2 million in city gambling taxes last fiscal year.

“We have no crime problem. None. No type,” Shepard said. “The (casino operators’) attitude is that they have to be squeaky clean or people won’t go there.”

Sgt. Gregory Chapin, head of the gambling squad in the Los Angeles County Sheriff’s Department, strikes a balance between officials who condemn casinos and those who say the clubs are clean.

Chapin cautioned against relying on crime statistics. Victims of casino-related crimes are often Asian immigrants and reluctant to cooperate with police because of a cultural distrust of authorities and a fear of retaliation by Asian gang operatives, he said.

Big casinos also ban hundreds of suspected criminals a year and never notify police agencies of the possible crimes of those patrons, he said.

Casino-related crime “is a problem,” said Chapin, the detective perhaps most familiar with Southern California card clubs, “but maybe not as much of a problem as some people think.”

Street crime has not been significant near the clubs, because some casinos have security forces larger than the cities’ police departments, Chapin said.

But loan-sharking, extortion, bookmaking, forgery and credit card fraud have sharply increased since fast-paced, high-stakes Asian games were introduced in 1984, he said.

So have so-called “follow-home robberies,” where thieves spot big winners at casinos and rob them once they leave, according to Chapin.

During one four-month period in 1992, for example, the Los Angeles County Sheriff’s Department reported that robbers tracked 26 winners home from the Bicycle Club, California Commerce Club and the Normandie casino in Gardena and stole an average of $10,900 from them. Most of the victims were Asian and two were slain.

Chapin and several federal authorities have concluded that Asian gangs are active in Los Angeles County’s card clubs, laundering money and feeding off Asian customers who provide a minority of the casinos’ customers but a majority of their revenue.

“The Asian games brought with them large amounts of money,” Chapin said. “On a given evening millions of dollars are crossing the tables. The amount of money that changes hands on a given table far exceeds anything you’ll see in Vegas.”

Ventura County’s debate about gambling echoes that in numerous cash-strapped Southern California communities where card clubs have been proposed over the last two years.

Citing concerns about Asian gangs and other organized crime activity, the San Diego County district attorney and San Diego police chief issued concurrent 1992 reports denouncing two proposals to bring large card rooms to that county. Both plans were defeated.

A report by Dist. Atty. Edwin L. Miller Jr. concluded that crime associated with big casinos would greatly outweigh the financial benefits.

“In our view, these monetary rewards have come at the expense of public safety and have opened the doors of these cities to organized crime as well as prostitution, loan sharking, money laundering, extortion and robbery,” Miller said.

Miller cited the histories of California’s two largest casinos--the Bicycle Club in Bell Gardens and the California Commerce Club--as evidence of the corrupting influences of casinos.

The Commerce Club, which is backing one of the Oxnard proposals, was the center of a high-profile scandal in 1984, when four City of Commerce officials--including three City Council members--pleaded guilty to participating in a hidden-ownership scheme.

Since then, the current owners have operated without further charges of political corruption and the City of Commerce received $10.2 million in taxes in 1991-92 form gambling receipts that approached $80 million.

The San Diego city report said that none of the club owners had a criminal history.

But police investigators found that one shareholder had an apparent conflict of interest involving the North American Boxing Federation, one owned a trash company in Hawthorne whose award was criticized by a county grand jury and another owned a casino in Adelanto embroiled in a corruption investigation involving that city’s police chief.

The IRS also imposed multimillion-dollar penalties on the Commerce Club last year for failing to report large cash transactions, sources said. They added that the IRS investigation is continuing.

Commerce Club officials refused to discuss the IRS case except to acknowledge a federal audit. Board member Peter Lynch said his casino is cleanly run, though the card club industry might have some problems.

“It’s much like bingo parlors,” Lynch said. “It’s whether they’re there for religious purposes or just for a bunch of greed.”

The San Diego reports also noted the IRS’ $4.6-million penalty against the Bicycle Club in 1992, which club General Manager George Hardie said was settled for about $500,000.

The federal government seized the Bicycle Club in 1990 after a jury found the $22-million casino was built mostly with drug money. Federal authorities own 20% of the casino and are trying to secure another 16%.

And, according to the San Diego police report, the head of a large Asian game concession at the Bicycle Club is under investigation in a broad loan-sharking and extortion case that has resulted in the conviction of a former club employee.

An affidavit filed in that case said that the club’s Asian game manager is believed to be an associate of an international Asian gang, prosecutor Miller said.

“What are we left with, then?” Miller asked in his report. “A proposal that is attractive solely because it dangles a carrot before a financially hungry local government, but a proposal that would also strain local (police) resources, attract criminals and debase the quality of life.”

Bicycle Club executive Hardie said Miller and other law enforcement officials take on his casino “because we’re an easy target. But we think we do a good job in terms of being a law-abiding citizen.”

Hardie acknowledged that some club employees have been arrested, but considers charges of Asian gang influence, loan-sharking and extortion “overblown dramatically.”

“I don’t believe for a minute that there’s all this supposed activity going on in the club,” he said. “Otherwise we’d have had more arrests. Sometimes we have more undercover cops in here than we have customers.”

That point raises an issue that concerns Oxnard Police Chief Hurtt. How much policing would a casino require, and how much gambling revenue would remain after those costs are deducted?

“I guess it’s a gamble that you take when you go into this business,” Hurtt said. “How much is it going to register in crime and draw down on your (police) resources? I don’t know if any of the revenue is going to be targeted for the Police Department.”

The 50,000-square-foot casino envisioned by two groups who have filed applications with the city would rank as the sixth- or seventh-largest in California, and would produce an estimated $500,000 to $2 million a year in gambling taxes. A casino would also bring $500,000 a year for charities and between 400 and 600 jobs, applicants say.

Oxnard City Council members say they are considering a casino to help replace $4 million in budget cuts next fiscal year. But they also say that their greatest concern is that a casino might become a haven for criminals.

Early this month, Oxnard officials learned that one casino promoter--political consultant Timothy M. Carey of Torrance--was convicted last year of felony lewd conduct with a 12-year-old girl. In addition, a second Los Angeles County businessman who was involved in Carey’s proposal also had participated in an early 1980s hidden-ownership scheme in the city of Bell.

A second casino promoter received backing last week by directors of the Commerce Club. A third casino group headed by former federal prosecutor and Las Vegas casino owner Richard P. Crane Jr. emphasizes Crane’s experience and integrity in presentations to the city.

Dist. Atty. Bradbury, whose office is interviewing casino applicants and checking their histories, has said he is impressed by Crane’s clean background. But Bradbury added last week that applicants’ credentials are not the real issue.

“I don’t care who it is, how good they are or how clean they are, there’s going to be a serious criminal problem around any big-scale gambling operation in Oxnard,” Bradbury said.

No head of a local law enforcement agency seems as sure about that as Bradbury, though most say they’d rather not have a casino in Oxnard. And others say budget cuts have made them reconsider their strict opposition to casinos.

“I don’t want it to sound like I’m leading the pack for card clubs. That’s not where I am or have been,” Sheriff Larry Carpenter said. “(But) I recognize the need to examine every possible source of revenue base for local government.”

Carpenter said the inherent crime risks of casinos must be weighed against the costs of neutralizing those risks. “They’re expensive and some balance has to be drawn on whether or not the venture is worthwhile,” he said.

Ventura is the only local jurisdiction with card clubs, and police officials have said those tiny mom-and-pop operations have created no extraordinary crime problems.

But the Ventura clubs have just four tables, not the 50 planned in Oxnard, and do not offer Asian games. A large question Oxnard applicants must answer, in fact, is whether they plan to offer those high-stakes games--played with both cards and domino-like tiles.

Crane and Carey have both said in interviews that they would want some Asian-game tables. But Crane said he would not turn those concessions over to Asian subcontractors, as has sometimes occurred in Los Angeles County.

Nor would the nearby Asian population seem to support much activity. The Los Angeles County clubs draw from 1 million potential Asian-American customers within a 30-mile radius, while just 35,000 Asian-Americans lived in Ventura County in 1990 and 112,000 in the San Fernando Valley.

Oxnard’s Chief Hurtt said he plans to conduct an in-depth study of casino-related crime after the City Council decides if it wants gambling at all.

“We’re not going to sit on our hands and let somebody come in here and take advantage of us,” Hurtt said. “There’s a lot of stuff surrounding this that’s food for thought, that’s for sure.”