Fear In Wake of Raid On City’s ‘Crown Jewel’

April 6, 2017 by · Leave a Comment 

The Bicycle Hotel and Casino reopened in the pre-dawn hours Wednesday following a raid by federal agents that temporarily closed the facility to the public.

But not before raising fears about the possible hit the closure could have on workers and the city of Bell Gardens where it is located.

Dozens of law enforcement officials with the Los Angeles High Intensity Financial Crime Area Task Force — which includes the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE), IRS Criminal Investigation, the California Department of Justice, Bureau of Gambling Control and the United States Attorney’s office — descended on the property around 7:00 a.m. Tuesday to execute a search warrant. Sources, speaking on the condition of anonymity, said the warrant was related to money laundering by “high-rollers” who frequent the gambling facility.

Law enforcement officials with the Los Angeles High Intensity Financial Crime Area Task Force raided The Bicycle Casino in Bell Gardens Tuesday. (EGP photo by Nancy Martinez)

Law enforcement officials with the Los Angeles High Intensity Financial Crime Area Task Force raided The Bicycle Casino in Bell Gardens Tuesday. (EGP photo by Nancy Martinez)

Bell Gardens police have in the past taken part in these types of joint federal task forces, but told EGP Tuesday they were not involved in Tuesday’s raid.

It is not yet clear what the task force was looking for because, according to Virginia Kice of U.S. Immigration and Customs Enforcement, “The search warrant issued by a United States magistrate judge was filed under seal in relation to an ongoing investigation.

“Because the warrant is under seal, we are not able to comment on the scope or nature of the investigation.”

The task force, however, is known to target money laundering, so there’s speculation Tuesday’s raid could be related to organized crime.

The Casino did not respond to EGP’s request for comment, but in a statement released prior to the reopening, said: “We are serving our customers and resuming normal operations immediately. Our priority is to provide a safe and fun environment for our guests.”

Federal task force raids Bicycle Hotel and Casino in Bell Gardens Tuesday morning. (EGP Photo by Nancy Martinez)

Federal task force raids Bicycle Hotel and Casino in Bell Gardens Tuesday morning. (EGP Photo by Nancy Martinez)

With the exception of a few hotel and casino managers, most employees were allowed to leave the premises Tuesday.

Boxes of items believed to be financial documents were removed from the Casino. No arrests were made.

As the raid got underway, players inside the Casino were told to leave immediately. Some were left scrambling to gather up their chips, unsure if or when they would be allowed to exchange them for cash. The Casino was closed to the public until 3 a.m. Wednesday, but hotel guests with a room key card were allowed inside.

News of the raid spread quickly through the small Southeast city, drawing people to stand outside the facility to get a closer look.

It also sparked conversation amongst neighbors, with some venturing their own ideas about the early morning raid.

Jorge Gonzales, a longtime city resident whose mother at one time worked for the Casino, told EGP he believes federal investigators are looking into criminal activity he says has been going on for years.

“I’m not surprised, it’s actually about time they look into what’s going on here,” he said.

“This place was put up with gangster money,” he said, referring to the Casino’s early history.

Founded in the mid-1980s, the Bicycle Club was seized in 1990 by the federal government after investigators said the club was partly built with laundered drug money.

For Bell Gardens City Manager Phil Wagner, retelling the past seems unfair.

“Some in the media have used the events of today as an opportunity to dredge up unrelated issues that happened 27 years ago when the Casino was under completely different ownership and management,” he told EGP in an email. “That’s totally unfair to the Casino and to this community.”

Many Bicycle Hotel and Casino employees live in Bell Gardens, so the raid Tuesday on the city’s top source of revenue is a serious concern to some residents, both for their wallets and their reputations.

“Most people who work here are honest, humble, good people,” said one employee, who did not want to use his name out of fear of putting his job at risk.

“The people gambling are not from Bell Gardens,” he added, implying the raid may have been targeting activity by foreigners.

Bell Gardens’ financial stability depends heavily on the Casino and Tuesday’s raid put the spotlight on the importance of that relationship.

“I can’t imagine what will happen if they close this place down,” said one worried employee.

“It’s not beneficial for the casino or the city” for it to be closed down, interjected a woman in Spanish.

The Bicycle Casino Hotel opened to great fanfare in December 2015. Gov. Jerry Brown was at both the groundbreaking and grand opening of the $50 million, seven-story, 100-room hotel.

In years past, nearly half of Bell Gardens’ General Fund revenue has come from the Casino. It is expected to generate $13 million in funds for the city during the 2016-17 fiscal year that ends in June, an amount projected to be slightly higher in 2017-2018.

While Casino operations appear to have returned to normal, a long time closure or the revoking of its license, or any event that results in a big drop in business, could have a negative impact on city finances. In 2012, for example, when Casino revenue dwindled to an all-time low, Bell Gardens found itself with a budget deficit that required a great deal of belt-tightening.

However, such drastic action – long time closure or revoking the Casino’s license – seem unlikely based on similar raids of other casinos.

Federal authorities last year investigated the Gardena card club formerly known as the Normandie Casino for violating anti-money laundering laws.

The partnership that ran the Normandie was ordered to pay about $2.4 million to settle federal charges that the poker club failed to report large cash transactions to federal authorities, as required.

As part of an agreement with the government, the four partners agreed to pay a $1 million fine and to forfeit nearly $1.4 million for failing to maintain an effective anti-money laundering program and conspiring to avoid reporting to the government the large cash transactions of some of the casino’s “high-roller” gamblers.

Under the Bank Secrecy Act, casinos are required to implement and maintain programs designed to prevent criminals from using the clubs to launder the large sums of cash that illegal activity can generate.

For example, casinos must record and report to the government the details of transactions involving more than $10,000 by any one gambler in a 24-hour period.

Wagner said he does not believe the current Casino owners and management are the targets of this investigation, citing reports that the probe is focused on individual gamblers who may or may not have used the casino to launder illegally obtained cash.

“Unfortunately for the many law-abiding customers of the Casino, its employees and the community which has suffered a great deal of negative publicity,” Wagner told EGP.

Longtime Bell Gardens resident Nury Balmaceda calls the Casino the working-class city’s “crown jewel.”

It “helped build all this,” she said, pointing to the surrounding development that now includes high producing retailers like Ross and Marshals and the newly opened Dunkin’ Donuts and Chipotle.

“It helped bring all these businesses here.”

She found the presence of ICE agents in the Southeast city, home to a large immigrant population, alarming.

“A lot of undocumented people may be afraid to come out,” said Balmaceda, who hopes nothing bad comes out of the raid.

In addition to city revenue, The Bicycle Casino Community Foundation provides scholarships for local students, recognizes local businesses and hosts an annual Christmas celebration for low-income residents.

“This is hit for the people of Bell Gardens,” Balmaceda said. “In the end we are the ones who will pay for it.”

 

An earlier version of this story was posted Tuesday to EGPNews website. Information from City News Story was use in this report.

 

Feds Raid Bell Gardens Bicycle Casino

April 4, 2017 by · Leave a Comment 

Bell Gardens relies heavily on revenue from the Bicycle Hotel and Casino, but today’s raid by federal agents could lead to a substantial economic hit to the Southeast city if the Casino is closed for a prolonged period, or shut down permanently.

Dozens of law enforcement officials with the Los Angeles High Intensity Financial Crime Area Task Force — which includes the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE), IRS Criminal Investigation, the California Department of Justice, Bureau of Gambling Control and the United States Attorney’s office — executed a search warrant at the Casino around 7 a.m. Tuesday.

Federal task force raids Bicycle Hotel and Casino in Bell Gardens Tuesday morning. (EGP Photo by Nancy Martinez

Federal agents raid Bicycle Hotel and Casino in Bell Gardens Tuesday morning. (EGP Photo by Nancy Martinez)

Bell Gardens police, who have in the past taken part in other joint federal task forces, were not involved in today’s action, the department told EGP.

It is not yet clear what the task force was looking for because “The search warrant issued by a United States magistrate judge was filed under seal in relation to an ongoing investigation,” according to Virginia Kice of U.S. Immigration and Customs Enforcement. “Because the warrant is under seal, we are not able to comment on the scope or nature of the investigation.”

She said it’s “an ongoing investigation.”

Because the task force is known to target money laundering, there is speculation today’s raid could be related to organized crime.

A call by City News Service to the poker club’s legal department was not immediately returned.

(EGP photo by Nancy Martinez)

(EGP photo by Nancy Martinez)

With the exception of a few hotel and casino managers, most employees were allowed to leave the premises.

A woman resembling Julie Coyne, executive director of the Bicycle Casino Community Foundation, was caught by a helicopter news camera being escorted by federal agents into the Casino early in the morning.

The task force is expected to seize financial documents from the Casino. No arrests have been made so far.

The Bicycle Casino – known to many poker players as The Bike – is expected to be closed to the public for the rest of the day, but hotel guests who could show a room key card were being allowed to return to the Casino.

News of the raid spread quickly through the small city, drawing people to stand outside the facility to get a closer look.

It also led to a lot of conversation amongst neighbors, with some speculating as to the reasons behind the early morning raid.

Jorge Gonzales, a longtime city resident whose mother at one time worked for the Casino, told EGP he believes federal investigators are looking into criminal activity he says has been going on for years.

“I’m not surprised, it’s actually about time they look into what’s going on here,” he said.

“This place was put up with gangster money,” he said, referring to the Casino’s history.

Founded in the mid-1980s, the Bicycle Club was seized in 1990 by the federal government after investigators said the club was partly built with laundered drug money.

 

(EGP photo by Nancy Martinez)

A number of casino employees — who did not want to be identified for fear of putting their already uncertain jobs at risk —told EGP they had not been told if they should show up for their next work shift.

“Most people who work here are honest, humble, good people,” said one employee. “The people gambling are not from Bell Gardens,” he added, implying the raid may be targeting activity by foreigners.

Many Bicycle Hotel and Casino employees live in Bell Gardens. Several said Tuesday they are worried about their jobs.

“I can’t imagine what will happen if they close this place down,” said one worried employee, who hopes he will still receive his paycheck this week.

“It’s not beneficial for the casino or the city” for it to be closed down, interjected a woman in Spanish.

The Bicycle Casino Hotel opened with great anticipation in December 2015. Gov. Jerry Brown was at both the groundbreaking and grand opening of the $50 million, seven-story, 100-room hotel.

In years past, nearly half of Bell Gardens’ General Fund revenue has come from the Casino. It is expected to generate $13 million in funds for the city during the 2016-17 fiscal year that ends in June, an amount projected to be slightly higher in 2017-2018.

(EGP photo by Nancy Martinez)

(EGP photo by Nancy Martinez)

A long time closure or the revoking of the Casino’s license could have a negative impact on city finances. In 2012, when Casino revenue dwindled to an all-time low, Bell Gardens found itself with a budget deficit that took a toll on some city services.

Call to Bell Gardens officials for comment were not immediately returned.

The possibility of such drastic action – long time closure or revoking the Casino’s license – seem unlikely based on similar raids of other Casinos.

Federal authorities last year investigated the Gardena card club formerly known as the Normandie Casino for violating anti-money laundering laws.

The partnership that ran the Normandie was ordered to pay about $2.4 million to settle federal charges that the poker club failed to report large cash transactions to federal authorities, as required.

As part of an agreement with the government, the four partners agreed to pay a $1 million fine and to forfeit nearly $1.4 million for failing to maintain an effective anti-money laundering program and conspiring to avoid reporting to the government the large cash transactions of some of the casino’s “high-roller” gamblers.

Under the Bank Secrecy Act, casinos are required to implement and maintain programs designed to prevent criminals from using the clubs to launder the large sums of cash that illegal activity can generate.

For example, casinos must record and report to the government the details of transactions involving more than $10,000 by any one gambler in a 24-hour period.

City Manager Phil Wagner does not believe the current Bicycle Hotel and Casino owners and management are the targets of this investigation citing reports that the probe is focused on individual gamblers that may or may not have used the casino to launder illegally obtained cash.

“Unfortunately for the many law-abiding customers of the Casino, its employees and the community which has suffered a great deal of negative publicity,” Wagner told EGP.

Wagner went on to criticize media reports that used today’s events as an opportunity to  bring to light “unrelated issues that happened 27 years ago when the casino was under completely different ownership and management.”

“That’s totally unfair to the Casino and to this community,” Wagner told EGP.

Even if not closed, heavy fines would hurt Casino revenue, losses that could in turn hurt the city’s budget.

The Bicycle Casino has always been the crown jewel in the working class city, longtime Bell Gardens resident Nury Balmaceda told EGP.

It “helped build all this,” she said, pointing to the surrounding development that now includes high producing retailers like Ross and Marshals and the newly opened Dunkin’ Donuts and Chipotle.

“It helped bring all these businesses here.”

Other residents were concerned by the presence of ICE agents in the Southeast city, home to a large immigration population.

“A lot of undocumented people may be afraid to come out,” noted Balmaceda, who hopes nothing bad comes out of the raid.

In addition to city revenue, The Bicycle Casino Community Foundation provides scholarships for local students, recognizes local businesses and hosts an annual Christmas celebration for low-income residents.

“This is hit for the people of Bell Gardens, in the end we are the ones who will pay for it.”

Information from City News Service was used in this report.

[Update 7:15p.m.] to include statement from Bell Gardens City Manager.

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