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BJ Cruz goes after gambling profits

By Troy Torres

(Tumon, Guam) Public Auditor Benjamin F. Cruz lashed out on government officials responsible for the conduct of casino gaming at the recent Liberation Carnival. In an audit released last week of the gambling operation's financials, Mr. Cruz lamented the poor financial controls that resulted in the claim that the gambling operator paid more in winnings than gamblers put into the pot. The operators paid almost nothing in taxes and licenses as a result. Mr. Cruz does not know how much in gross is collected as that is not required to be audited under the law. Mr. Cruz believes the tax should be levied against gross, which it is currently not.

The parallels between the carnival casino and the tax on Liberty machines is notable. The Legislature in 2013 allowed the operation of blood money-sucking Liberty machines in exchange for a tax on profits after cash winnings are backed out, meaning the government has lost out on hundreds of millions of dollars unaccounted for and circulating in the black market.

Mr. Cruz's audit of the carnival casino coincides with Kandit's investigation into the Liberty machines operated by Gil and Connie Jo Shinohara, Johnny "Cool" Torres, Lauren Bromley, and the estate of Pedro "Dongo" Pangelinan.

The Liberty owners, based on the taxes reported as paid between fiscal years 2015 and 2018, profited $107 million during those years AFTER supposed winnings were paid. The winnings, though taxable income, is virtually unreported unlike bingo operations, Liberty gameroom operators are not required to collect taxes on winnings as the winnings are paid out.

The cash nature of the business and the high potential for leakages raised suspicion from lawmakers and anti-gambling advocates, including Mr. Cruz, from the start that the money flowing through these gamerooms would go unreported. This has placed Kandit on a money laundering trail in its investigation; a piece of the Blood Money series that continues tonight regarding large scale land transactions and a federal banking investigation that all began in 2016.

Stay tuned for tonight's continuing coverage of Blood Money to hear this story and others.

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