Subpoena fight resolved over FBI-Caesars search

By Ken Ritter, Associated Press

Published Thursday, Nov. 6, 2014 | 9:04 a.m.

Updated Thursday, Nov. 6, 2014 | 4:53 p.m.

A federal judge in Las Vegas heard defense attorneys allege Thursday that the FBI improperly enlisted Caesars Palace officials to obtain a crucial search warrant before arresting eight men now charged with setting up an international Internet gambling hub at the Las Vegas Strip resort.

The arguments in U.S. District Court didn't lead to the public airing of evidence that FBI agents with lapel cameras tricked their way inside a luxury villa by getting a contractor to shut off Internet access to the suite and then impersonating repair technicians. The Associated Press previously obtained and viewed that video.

Instead, Caesars attorneys sought to quash a subpoena requiring the surrender of email and business records that defense attorneys say will show the FBI violated the defendants' Fourth Amendment protection against unreasonable search and seizure.

U.S. Magistrate Judge Peggy Leen heard about 40 minutes of arguments before declaring she wouldn't quash the subpoena. The lawyers met separately and reached a deal a short time later that made no more hearings necessary.

Attorney Vincent Savarese, representing Caesars, said they agreed on a "narrowed scope" of disclosures.

David Chesnoff, attorney for lead defendant Wei Seng Phua, said that by receiving the documents, "we'll be able to pursue the truth."

The lawyers didn't disclose details.

Defense attorney Thomas Goldstein told the judge they think emails will show Caesars officials were "centrally involved" with federal investigators and prosecutors trying to find a way to obtain enough probable cause to get a search warrant against Wei Seng Phua.

"It's not the case that Caesars is innocently involved and just a third party," Goldstein said. "We need records that show their participation and what happened in the searches ... (and) if staff was directly involved in the process."

Monica Pinciak, a lawyer representing Caesars, said the casino company had nothing to hide. She said it already turned over business records relating to money transfers, and branded the subpoena a "fishing expedition" for emails and materials that could be used to hurt the company.

But when Leen asked if the business records included emails, Pinciak responded no.

"They want anything and everything," Pinciak protested, "to fish for unknown evidence to use in this case or their threatened civil suit against Caesars."

Under U.S. law, a person generally must consent to give up constitutional protections against unreasonable search unless authorities obtain a warrant. Evidence collected improperly is not supposed to be used at trial.

Prosecutors deny the tactics used to get a warrant in the Phua case were improper, but U.S. Attorney Daniel Bogden said the government would only comment about specific allegations in court.

Assistant U.S. Attorney Kimberly Frayn listened to Thursday's subpoena fight, but didn't take part.

Phua, his son Darren Wai Kit Phua, and defendants Seng Chen Yong, Wai Kin Yong, Hui Tang, Yan Zhang, Yung Keung Fan and Herman Chun Sang Yeung were arrested in three exclusive villas at Caesars on July 13. Each has pleaded not guilty to charges of transmission of wagering information, operating an illegal gambling business and aiding and abetting.

If convicted, each could face up to seven years in federal prison on the unlawful transmission and illegal gambling business counts, and fines of up to $500,000.

Phua also faces charges of running an illegal sports gambling business in the Chinese gambling enclave of Macau. He was arrested there June 18 and freed on bail. He flew a few days later to Las Vegas, where federal authorities impounded his private jet pending resolution of the U.S. case.

The allegation that the FBI used a ruse to get inside the hotel rooms came to light last month, at the same time questions were being raised about tactics used by federal agents in a drug case involving a New York woman and a bomb-threat case in Seattle.