Businessman Sued for Failure to Repay Casino Debts

Nevada law-enforcement agencies are currently seeking a Canadian real estate entrepreneur, who plays high-roller games, for failing to repay gambling debts of $12.9 million to two Las Vegas land casinos over a five-year period.

The 43-year-old entrepreneur Semion Kronenfeld is mentioned in an arrest warrant that was issued after the grand jury of a Clark County District Court charge him on counts of bad checks, felony, fraud, and using criminal methods to get money.

This case is one of the biggest ones related to casino debts to reach Nevada courts. If Kronenfeld is convicted, he will get several decades in the Nevada prison.

Craig Mueller, Kronenfeld’s Las Vegas legal representative, has refused to comment. Jake Merback, prosecutor and head of the bad check unit of the Clark County district attorney’s office, said that they did not know Kronenfeld’s whereabouts.

According to Nevada authorities, the high-roller had mentioned that he owns a real estate investment company in Ontario and that he holds an Israeli passport on his casino credit records, which mention his name as Cronenfeld, not Kronenfeld.

Kronenfeld has been charged with failure to repay casino IOUs worth $5.9 million to the Venetian Resort, a casino located on the Strip, and $5 million to the Henderson-based Green Valley Ranch Resort.

According to Nevada’s gambling laws, IOUs, which are also referred to as markers, are treated as bad checks. The laws give prosecutors the power to collect a prosecution and processing fee of 10 percent on settlements. For this reason, most such cases are resolved without filing any charges.

The fraud case filed against Kronenfeld is among the biggest of such cases to be heard in court ever since Nevada lawmakers introduced the “credit extended by any licensed gaming establishment” provision to the law related to bad checks in 1995.

An ice cream businessman from California, who was charged with failure to repay casino IOUs worth $384,000 in 2008, had challenged the bad check law in court, and this case is currently in the state’s Supreme Court. According to this businessman, casino IOUs are not personal checks, but business loans given for a short time, as casinos redeem them only after holding them for many months.

Harrah’s Entertainment Inc. had sued Terrance “Terry” Watanabe, who used to own the Oriental Trading Co in Omaha, for not repaying casino debts of $14.75 million. The wealthy entrepreneur countersued the casino, and a year later in 2010, the two parties signed an amicable settlement.

There are many other examples of bad check cases. One of them is the case between Joe Francis, founder of “Girls Gone Wild” and a few casinos belonging to Steve Wynn, a casino entrepreneur residing in Las Vegas. Francis had not paid a casino loan of $2.5 million. The case between these two is still in the Nevada Supreme Court.

In another case, Antoine Walker, former NBA star, was convicted in the year 2011. Since Walker had admitted he was guilty during trial, he had to pay the casino $770,000 and undergo a five-year probation.

« »