Borgata Counters Phil Ivey Dismissal Motion, Alleges ‘Chargeable’ Acts
Legal counsel representing Atlantic City’s Borgata Hotel Casino & Span has filed a countering motion to a motion filed on behalf of Phil Ivey, seeking to dismiss a lawsuit over the $9.8 million won by Ivey via the use of an “edge sorting” card-identifying technique at the Borgata’s high-stakes tables during four visits in 2012.
In the latest filing, the Borgata’s attorney, Jeremy Klausner, alleges that Ivey and his companion, co-defendant Cheg Yin Sun, states that, “Borgata specifically alleges acts involving gambling that are chargeable under
state law and carry a prison sentence of more than one year.”
One of the key elements in the latest filing by Klausner, from the Hackensack, NJ legal firm of Agostino & Associates, P.C., addresses a dispute raised in Ivey’s motion to dismiss the Borgata’s civil RICO [Racketeer Influenced and Corrupt Organizations Act]. Earlier this month, Ivey’s legal firm, Jacobs & Barbone P.A., had filed a dismissal motion in the case, and this latest response specifically addresses each of the points raised by Ivey’s and Sun’s attorneys.
The ongoing war of legal words over the Borgata’s civil RICO allegations provides some of the latest filing’s most provocative reading. Wrote Klausner in his response, “Defendants’ final argument is that the federal and state civil RICO claims should be dismissed because Defendants did not commit any predicate or fraudulent acts. While Defendants’ argument is again clever, it is also fatally flawed. In arguing that no predicate acts were committed, Defendants simply assume the conclusion that none of their conduct constituted racketeering activity.”
The Borgata’s latest filing notes that it isn’t responsible for filing any criminal charges, and that in a civil case such as this, the burden of proof is far lower, requiring only a preponderance of the evidence rather than the proverbial “beyond reasonable doubt” standard common to criminal cases. Nonetheless, Klausner, on behalf of the Borgata, alleges their belief that Ivey and Sun did engage in criminal activity.
From the latest brief:
Defendants simply assume the conclusion that none of the conduct alleged “could possibly constitute a fraudulent act under the wire fraud statute,” and that “[c]learly, edge sorting is legal. Therefore, the proceeds from edge sorting are legal gambling winnings.” … In so doing, Defendants ignore both the statute and the standard upon which a motion to dismiss is decided. First, the civil RICO statute does not provide that a defendant must be found guilty of an offense, only that the conduct is “chargeable” or “indictable.” Whether a defendant is guilty of a crime is decided by a jury under a different standard of proof. Second, on a motion to dismiss, the standard is whether the allegations in the Amended Complaint, taken as true, make out a cause of action. If true, Defendants are clearly “chargeable” or “indictable” under New Jersey and federal laws.
Borgata specifically alleges acts involving gambling that are chargeable under state law and carry a prison sentence of more than one year. Pursuant to [NJ gambling law], it is a crime to “knowingly by…fraud or fraudulent scheme…or device…win or attempt  to win money … in connection to casino gaming.” Where the amount involved is over $75,000, it is a crime of the second degree, which carries a potential prison sentence of 5-10 years. Pursuant to [NJ gambling law], it is unlawful to use any cheating device with intent to cheat or defraud. This is a crime of the fourth degree, which carries a potential prison sentence of up to eighteen months . Borgata’s Amended Complaint sets forth in detail the acts committed as part of Defendants’ fraud and fraudulent scheme as well as their use of cheating devices. If accepted as true, these acts involve gambling, are indictable under New Jersey law, and are punishable by imprisonment of more than one year.
The RICO-related assertions and countering motion are part of the lengthy list of assertions filed against Ivey and Sun, his female companion during the trips, who allegedly assisted Ivey in a highly contrived series of “superstitions” designed to manipulate the Borgata’s Mandarin-speaking deal into rotating certain valuable baccarat cards within the dealer’s shoe so that they were subtle printing variations on the card backs were identifiable.
The claims made by the Borgata against Ivey and Sun include breach of contract, breach of implied contract, breach of implied covenant of good faith and fair dealing, fraudulent inducement, fraud, unjust enrichment, conversion, civil conspiracy and participation in a RICO enterprise. The Borgata’s filing also includes claims against the manufacturer of the alleged faulty cards, US-based Gemaco, Inc, and an unnamed Gemaco employee.
All told, the Borgata asserts that Ivey profited by $9.626 million during his actual play at the casino’s mini-baccarat tables. Ivey has already acknowledged employing the identical “edge sorting” method in a separate case involving London’s Crockfords Casino, which has withheld millions more won by Ivey in a similar manner at punto banco, a closely-related baccarat variation. While Ivey’s attorney’s have acknowledged that Ivey and Sun employed the edge sorting, part of their defense is a declaration that such a tactic is not illegal under New Jersey law.