Developer loses bid for license
Friday, January 24, 1997
Developer loses bid for license
A state board rejects a Henderson man's request for a gaming license because of past billing problems.
By Dave Berns
Review-Journal
State regulators Thursday unanimously rejected a Henderson real estate developer's bid for two gaming licenses amid allegations that he diverted as much as $800,000 from one of his Las Vegas operations.
The application of Steven Rebeil, a developer of the African-themed The Reserve, was rejected by the Nevada Gaming Commission after the completion of a lengthy investigation by state officials.
The five-member panel denied the licenses after reviewing investigators' reports that Rebeil overcharged customers for framing and concrete work done by his Gem Homes residential development company.
The regulators argued that Rebeil used the money for the construction of his own home in the upscale Spanish Trail subdivision.
"The full record was developed, and there's not much to say," said Bill Curran, the Gaming Commission chairman. "He was not candid with the board and obstructed the investigation."
Rebeil has not been charged with any crimes.
Rebeil's lawyer, Dominic Magliarditi, was granted an extension until Feb. 19 on his own licensing request after he told commission members that he was seeking a new lawyer for himself.
Rebeil was in Daytona Beach, Fla., Thursday and did not attend the commission meeting. He told the Review-Journal that he was attempting to qualify a Porsche GT3 for the Feb. 1 running of the Rolex 24-hour race at Daytona.
"The bottom line is the Gaming Control Board (wanted to) use somebody as a scapegoat," Rebeil said. "I'm out of the gaming business completely.
"I think they don't want me in the business of buying land, developing it and getting out."
Rebeil's Gem Gaming Inc. sold its interest in The Reserve in June to Ameristar Casinos Inc. of Jackpot in a $106 million transaction.
At the time, the publicly traded Ameristar agreed to purchase the site at West Lake Mead Drive and U.S. Highway 95 for 7.5 million shares of its common stock and the assumption of $26 million in debt.
Since then, Rebeil has agreed to give up his stock in Ameristar by June 1 in return for the cash value of the 7.5 million shares. Rebeil also has agreed to hold no management position in The Reserve, which is expected to open this year.
Ameristar stock was down 25 cents a share Thursday to close at $5 on Nasdaq. Its 52-week high was $14.75 in June. The company also owns and operates Cactus Pete's and the Horseshu in Jackpot, and a dockside casino and restaurant in Vicksburg, Miss.
The Gaming Commission acted on an unanimous recommendation by the state Gaming Control Board to reject Rebeil's requests for licenses to participate in the operation of The Reserve and one of his subsidiaries, Pacific Gaming Sahara Inc.
Magliarditi also had applied for licensing in the two businesses.
In a Jan. 8 hearing that Rebeil did not attend, the board's three members questioned Magliarditi about the allegations that construction money was diverted to personal use.
Marvin Lipschultz, a Rebeil partner, had raised the accusations with gaming investigators, according to a board transcript. Regulators allege that Rebeil inflated billings by $2,500 a house on 220 homes in one development.
"He believed what was occurring was there was an overbilling and an accumulation of the overbilling by the subcontractor to effectively use the overstated amount that were accumulated in the construction of Steve's house," Magliarditi said of his own conversations with Lipschultz.
Rebeil "adamantly" denied any trouble, Magliarditi said, although he noted that his client discussed offering $250,000 to Lipschultz to settle the dispute.
In his Florida phone conversation, Rebeil denied any wrongdoing and said the work on his Spanish Trail home was performed by a friendly contractor.
"He gave me a freebie at my house," Rebeil said. "I also had an electrician who did some work."
Rebeil's actions also raised questions of possible income tax evasion, according to the 61-page transcript of the Jan. 8 hearing.
At that hearing, board member Steve DuCharme asked, "At least these allegations are at the very least probably embezzlement from a partner?"
Magliarditi: "Potentially, yes."
DuCharme: "Failure to report income, tax evasion?"
Magliarditi: "Potentially, correct."
DuCharme: "Some of these allegations could have criminal implications?"
Magliarditi: "If they're accurate, that's correct."
Magliarditi also was criticized by board members for underreporting his own 1994 taxes by $70,000 to $80,000. He said he has since amended his 1994 taxes but hasn't repaid the debt.
Investigators further alleged that Magliarditi adjusted legal billings favorably for Rebeil before going to work for him full time in 1994. At the time of the adjustments, Magliarditi represented Rebeil while working for the Las Vegas firm of Vargas & Bartlett, according to the transcript.
Magliarditi previously told the control board that he might have adjusted the billings to the detriment of his previous employer because he was frustrated at not receiving an annual bonus.
Both Rebeil and Magliarditi previously had attempted to withdraw their requests for gaming licenses, but the control board rejected the offer, preferring to deliver a decision on their qualifications for licensing.
"It was really a suitability issue. They had not met the burden of proof," said commission member Bob Lewis. |
