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October 1, 2016

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Court filings reveal investigation into Reno Nugget finances

Updated Friday, Feb. 12, 2016 | 1:05 p.m.

RENO — Court filings have revealed a federal investigation into the financial practices of The Nugget in Reno under the ownership of the Ascuaga family.

The court filings are part of an ongoing legal dispute between the Ascuagas and Wolfhound Holdings LLC, the company that purchased the hotel-casino in 2013.

An investigation by the Financial Crimes Enforcement Network was detailed in a lawsuit filed Wednesday by Wolfhound Holdings in Washoe District Court. The holding company suggests the Nugget was investigated for failing to meet federal record-keeping and reporting requirements and for not establishing an effective anti-money laundering program.

The status of the investigation was not revealed in interviews or in documents.

Michonne Ascuaga, daughter of John Ascuaga, was the CEO of The Nugget for 16 years. She said in a statement that she was never the target of the investigation. She said she has not had any contact with investigators since November 2013.

"The Sparks Nugget was informed in November 2013 by the Department of Treasury that the Department was investigating whether it was appropriate to impose civil penalties for possible violations of anti-money laundering regulations," she said in the statement. "The matter arose from an audit-type examination conducted by the IRS at the casino in 2010. This was all disclosed immediately to the buyer."

She said after the sale, Wolfhound Holdings assumed the responsibility of resolving those issues with federal regulators.

Nugget spokesman Joe Sala said the hotel-casino's owners have no comment on the matter.

The dispute between Wolfhound Holdings and the Ascuaga family started in January 2015 when the family filed a lawsuit against Wolfhound, claiming they were still owed money under the purchase agreement.

John Echeverria, the Ascuagas' attorney, said Wolfhound Holdings knew about the problems the property was facing before the purchase.

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