2 Casino Executives Accused of Laundering


Two executives at the Cabazon Band of Mission Indians’ gambling casino in Indio were accused in a federal grand jury indictment Thursday of laundering thousands of dollars in illegal contributions to six Democratic candidates, including President Clinton and U.S. Sen. Dianne Feinstein.

In announcing the indictment, U.S. Atty. Nora Manella said there is no evidence that any of the candidates, their staffs or any officials of the tribe were aware of the illegal donations.

Other candidates receiving laundered contributions were U.S. Sen. Tom Harkin (D-Iowa), Rep. Esteban Torres (D-Pico Rivera), Rep. Bob Carr (D-Mich.) and unsuccessful congressional candidate Steve Clute of Palm Springs, according to the indictment.

The indictment did not specify exactly how much money was contributed to the candidates through conduits. Assistant U.S. Atty. Jonathan Shapiro, who is prosecuting the case, would say only that “it involves tens of thousands of dollars.”


An attorney for the two defendants, Mark Nichols and Greg Cervantes, denounced the indictment as “politically motivated.”

Criminal defense lawyer Allan Sigel said the case was fomented “by gambling interests inside and outside the state that operate in competition with the Cabazon tribe.”

The Cabazon Indians and more than a score of other Indian tribes in California are locked in a bitter legal battle with state and federal officials over their use of slot machine-type gambling devices at reservation casinos.

Sigel said the indictments were aimed at impugning the integrity of Indian nations throughout the country.


“When you strip away the legal mumbo-jumbo, the government’s case has no credible evidence behind it,” he said.

Nichols and Cervantes are non-Indian employees of the Cabazon Band. Nichols serves as chief executive officer for the 45-member band, while Cervantes is director of special affairs.

Starting in 1994, the indictment said, Nichols became active in raising money for political candidates and recruited employees at the tribe’s Fantasy Springs Casino to make $1,000 contributions to candidates of Nichols’ choosing.

In return, he allegedly promised to reimburse the employees through checks written on the casino’s bank accounts.


Cervantes was allegedly involved in similar arrangements with casino employees.

But Sigel maintained Thursday that the employees gave freely and that the checks they got from the casino were not reimbursements for the donations, but bonuses that many workers received.

Nichols, 40, was charged with seven felony counts of causing the candidates’ campaign committees to make false statements to the Federal Elections Commission and two misdemeanor counts of making campaign contributions in the name of another.

Cervantes, 37, was charged with two felony counts of causing false statements to be made to the FEC and two misdemeanor counts of making illegal contributions.


They are to be arraigned in Los Angeles federal court July 6.

Nichols and Cervantes will have the full backing of the tribe when they go to court, said the Cabazon Indians’ lawyer, Edward L. Masry.

“We conducted an internal investigation for three months and found no evidence of wrongdoing of any kind,” he said.

Prosecutors said they would not respond to the defense lawyers’ comments. “They’ll have their day in court,” said Shapiro. The contributions cited in Thursday’s indictments are unrelated to the substantial soft-money donations given by the Cabazon Indians to Democratic causes in recent years.


In the year leading up to the 1996 election, the Cabazon Band gave $110,000 to major Democratic committees, according to Federal Election Commission records.

In 1994, the tribe spent $350,000 to defeat California Gov. Pete Wilson and Atty. Gen. Dan Lungren, both of whom have strenuously opposed Las Vegas-style gambling at Indian casinos in the state.

The Cabazons opened the nation’s first tribal poker parlor in 1980, setting off a legal battle with Riverside County that wound up before the Supreme Court. In a landmark 1987 opinion, the high court granted the Indians broad authority to operate high-stakes gambling.

That set the stage for adoption of federal rules requiring tribes to get approval from their home states before using slots or electronic gambling machines.


Today, most Indian gambling casinos in California offer slot machine-type gambling despite the fact that they have not negotiated compacts with the state. Gov. Wilson has said he will not deal unless the tribes first shut down their illegal machines.

The federal government recently jumped into the fray by suing the tribes for operating without state consent.