Card Club’s Political Consultant Indicted in Theft of $380,000

A former political consultant for the U.S.-controlled Bicycle Club casino has been indicted on charges of embezzling hundreds of thousands of dollars from the card club’s political campaigns.

Authorities said Charles G. “Jerry” Westlund Jr. embezzled $380,000 from the casino and its campaign committees, and used the money to buy low-rent apartment houses in Long Beach and Compton, among other purchases.

An indictment returned by the county grand jury also charges him with two counts of forgery and six counts of failing to file state tax returns.

Westlund, 32, is a former appointee to a state narcotics parole board and a well-known figure in California’s card club industry.

He pleaded not guilty at his arraignment Thursday. Superior Court Judge Jacqueline Connor ordered him to surrender his passport and released him. He is to return to court Dec. 18 for a bail hearing.

After his arraignment, Westlund told reporters: “There’s not a chance I’m talking.”

His lawyer, Douglas W. Otto, said he had not yet reviewed the evidence against his client, but that “everything he spent was authorized by his employer.”

His employer was a trustee for the federal government.

The U.S. Justice Department seized a controlling interest of the casino in 1990 as part of a narcotics money laundering case. Since then, a federally appointed trustee has supervised the casino for the U.S. Marshals Service, the arm of the department assigned to maintain seized assets.

A U.S. Marshals Service spokesman said the agency had not been asked to submit any information to the county grand jury, and declined to comment on the indictment.

For the Justice Department, the casino is the most valuable asset ever seized, yielding more than $30 million in profits. It is expected to make $22 million or more in a planned sale of its share to a British gaming company. But the department has also been buffeted by accusations of mismanaging the card club.

Westlund is the second Bicycle Club consultant to be indicted while the U.S. Justice Department has been overseeing the casino. Hollman Cheung, the former manager of the club’s lucrative Asian games section, was arrested in 1994 and later imprisoned for loan sharking, conspiracy and extortion.

Westlund’s attorney added his voice to the chorus of government critics Thursday.

“What is the federal government, stupid or incompetent?” he asked. “Until I get [the evidence], I can’t answer that.”

Harry Richard, a Las Vegas casino executive who became the government’s trustee and ran the casino from 1993 until he was forced to resign last year, has denied that he knew how Westlund spent the club’s political contributions.

Richard said the notion that he would approve illegal expenditures “doesn’t make any sense.”

During most of its involvement with the casino, the Justice Department allowed the Bicycle Club to take an active role in California politics as more than a dozen cities held elections in recent years to decide whether to open rival casinos.

With Richard’s approval, the casino poured more than $750,000 into its effort to persuade voters to oppose new card clubs in 1995, state records show. Since Richard resigned, the casino has not reported making any political donations.

Westlund’s political operation was widely successful. Voters defeated the ballot measures in all but one city.

The casino’s contributions went to three political action committees: Concerned Taxpayers of California, Californians Against Gaming Expansion and Public Information Service. Investigators believe that Westlund embezzled some of the money by directing the committees’ checks to post office boxes he owned. To hide the theft, investigators believe, Westlund tried to disguise the people he paid as people who worked for the campaign.

Much of the money, authorities said, went to Westlund’s real estate purchases. At one point he owned 202 rental units in Long Beach and Compton, but the titles to many of those properties have been transferred to corporations controlled by his father, they said.

Investigators believe that Westlund used the committees’ money to pay for construction work on his personal property and to make payments on a car loan, documents show.

Among the witnesses called before the grand jury were a Los Alamitos used-car dealer who investigators say was involved with the car loan, and a Colorado sports promoter who said in an interview that he sold Westlund a trip to Havana. Both were paid for with the Bicycle Club’s political contributions, according to campaign documents.

The indictment also states that Westlund forged another person’s signature on an IRS tax form and on a $7,000 check. He also failed to file tax returns for the last three years, it states.

If convicted on all charges, Westlund faces 10 years in prison.