Las Vegas Sun

November 14, 2018

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IRS launches probe against Gem Gaming

The Internal Revenue Service has launched a criminal investigation into Gem Gaming Co., original developer of Henderson's Reserve hotel-casino, according to IRS spokeswoman Marilyn Steen.

Steen said the team of agents at the unfinished hotel-casino executed a search warrant, which has been sealed.

A spokesman for Ameristar Casinos, Inc., the publicly traded company that acquired Gem Gaming and the Reserve last October and is redesigning the unfinished hotel-casino, said the investigation does not affect Ameristar or the Reserve.

"The matter does not pertain to the casino, nor does it pertain to Ameristar," said Brian Katz, Ameristar vice president.

The subject of the criminal investigation, according to various sources, is Steven Rebeil, the controversial head of Gem Homes and Gem Gaming Co., who is the subject of more than a score of lawsuits alleging improprieties in various business dealings.

Rebeil, who three months ago was denied a gaming license for the Reserve, could not be reached for comment Tuesday.

A voice message on a telephone at his trailer at Lake Mead Drive and U.S. 95 -- next door to the unfinished Reverse -- noted, "We're having some temporary difficulty with our phone lines this morning."

Meanwhile, various federal agents busily carried boxes of records out of the trailer.

The agents refused to talk to reporters.

"Call the U.S. Attorney's office," an agent said as he walked to his car.

Katz explained that after Rebeil and his attorney, Dominic Magliarditi, were denied gaming licenses to operate the Reserve, Ameristar severed its relationship with both men.

"Steve is entitled to keep his office (in the trailer outside the casino) until June 1," Katz said. "But we want to make it clear that we are not involved with this investigation. The agents haven't asked us for any of our records. What they wanted to ascertain was what is Gem's stuff and what is Ameristar's stuff."

Construction on the 200-room hotel with 35,000 square feet of casino space has been put on hold pending the results of an ongoing arbitration proceeding launched by Ameristar against Rebeil and Magliarditi.

Ameristar has charged that both men have intentionally interfered with the public corporation's recent planned offering of 7.5 million shares of additional stock, which was intended to raise the money to finish construction on the hotel.

"One of the consequences of their interference was that it killed our financing," Katz said. "Since then, we've been put on hold pending a resolution."