Mirage figure gets probation, judge calls sentence ‘silly’

By Liz Benston

Wednesday, Dec. 3, 2003 | 11:02 a.m.

A former Mirage casino employee who could have faced several years in jail for failing to file thousands of money-tracking reports with federal authorities was sentenced to three years of probation today.

Christopher Morishita, whose job duties included mailing cash transaction reports to the federal government, was arrested by Gaming Control Board agents in May and pleaded guilty in August. His guilty plea was tied to an agreement that he receive probation and no jail time.

Morishita is the first person to be prosecuted under Regulation 6A, the state law governing the cash transaction reports designed to prevent money-laundering in casinos.

Before sentencing Morishita, Clark County District Court Judge Joseph Bonaventure called the punishment "silly," as he has sent robbers to prison for several years for less-costly crimes.

"(Morishita) ripped off The Mirage and I give him probation," Judge Bonaventure said. "His employer has to cough up five million bucks. It seems to be a little silly."

The Mirage was fined $5 million by the Nevada Gaming Commission in June for failing to file the reports. The fine was the highest paid by a casino in state history. The event also led to the firing of several Mirage employees, including the chief financial officer and the controller. Both men are suing The Mirage in Clark County District Court, saying they were fired without cause.

Morishita didn't steal money from the resort, though he was responsible for millions of dollars in legal and administrative costs incurred by the resort, Chief Deputy Attorney General Elizabeth Quillin said.

Morishita will not be allowed to hold a gambling-related position and will be required to disclose his case with potential employers who hold state gaming licenses. If he completes the terms of his probation, his felony charge -- which carries a penalty of up to five years in prison -- will be reduced to a gross misdemeanor. Morishita must also pay a $1,000 fine while serving his probation.

Morishita declined to comment. He earlier admitted in an affidavit filed by the Nevada Attorney General's Office that he lied to supervisors about having sent the forms to hide the fact that he was months behind.

Public Defender Brigid Hoffman said Morishita will "comply with all his probationary requirements" and called the sentence "appropriate."

Quillin said the sentence is fair given that Morishita has no prior criminal record, "not even a traffic ticket." It still sends a "strong message" that employees follow the rules, she said.

During his probation, Morishita must account for his whereabouts and won't be allowed to leave the state without checking in first.

"That's a substantial imposition on his liberty," Quillin said.

Quillin characterized Morishita as a man who simply "got in over his head and didn't report it to his supervisors."

"He was in a position of trust and he violated that trust," she said.

Quillin commended state regulators and Mirage executives for their handling of the case. The Gaming Control Board was "relentless in digging to the bottom of this." When they learned of the problem, The Mirage initiated a round-the-clock audit that lasted four days, she said.

Besides hurting Morishita's casino career, the case has far-reaching implications for the gaming industry.

The Mirage has since initiated tougher auditing standards that include more frequent examinations by external auditors -- an act that other gaming companies may follow. Gaming regulators have also considered changing the method by which they receive information on cash transaction reports. The reports are filed with the Financial Crimes Enforcement Network of the U.S. Department of the Treasury on transactions of $10,000 or more. But the Treasury doesn't police the records and may not forward the information back to the state until long after irregularities are discovered.

The Mirage failed to file about 14,900 cash reports with the federal government at certain times from April 2001 to January 2003. Morishita told his superiors he had filed the reports, yielding clean reviews by both internal and external auditors.

State gaming regulators said auditors were at fault for not catching the error but ultimately blamed Morishita. The Attorney General does not intend to expand its investigation and found no evidence of money-laundering.