Thursday, May 22, 2003 | 11:13 a.m.
The probe by the Nevada Attorney General's Office and by gaming regulators into The Mirage resort's failure to file thousands of required cash transaction reports -- an incident dubbed "most embarrassing" by MGM MIRAGE's chief executive -- is being confined to one former employee, the Attorney General's Las Vegas chief said today.
The investigation will focus on Christopher Morishita, a former Mirage employee in charge of filing the reports who was arrested Wednesday. Morishita was arrested in connection with a previously reported Gaming Control Board investigation of the Mirage, with a criminal complaint expected by next week.
Jim Murren, chief financial officer of MGM MIRAGE, told the Nevada Society of Certified Public Accountants' 25th Annual Financial Executives Gaming Forum today in Las Vegas that the incident embarrassed the company and its chief executive officer.
"Terry Lanni (CEO of MGM MIRAGE) has said this was the most embarrassing incident in his 26 years in the industry," Murren said in response to a question during his keynote presentation.
Murren said the company ordered an internal investigation into the matter and determined that the reports were completed accurately, but never mailed to federal authorities.
"There are two parts to this job, doing the reports and mailing them. And the second part of the job was not done," Murren said. Murren told the accountants about the arrest and that "several people were fired" over the incident.
"It was intolerable to us," he said.
MGM MIRAGE is continuing to work with regulators in their investigation and Lanni ordered an audit to review procedures for financial reporting at all the company's properties.
The complaint against Morishita marks the first time anyone has been criminally charged in connection with Regulation 6a, a state law requiring Nevada casinos to file reports on large cash transactions with the federal government, Nevada Gaming Control Board enforcement chief Keith Copher said.
Casinos can be fined up to $25,000 per violation for failing to file the reports, which is a felony.
The Attorney General doesn't expect to charge other individuals, Chief Deputy Attorney General Elizabeth Quillin said.
"Our focus is on Mr. Morishita," she said. "We're not looking at anyone else."
Morishita was held Wednesday in the Clark County Detention Center and will be arraigned Tuesday at Clark County Justice Court, where he will enter a plea. At that time, the Attorney General will file a criminal complaint against Morishita, Quillin said.
Presuming Morishita stays in custody and can't post bail, a preliminary hearing will be set in about two weeks, she said.
If the case meets an initial burden of proof, it will move to Clark County District Court, which has jurisdiction over felony cases, she said.
"We wouldn't have (arrested Morishita) if we didn't think this was a cut and dry case," Quillin said.
"The most important thing that distinguishes this was that it was a deliberate act on his part. This isn't an oversight and it's not a clerical error."
Morishita could face from one to five years in jail as well as a court-imposed fine of $10,000.
A Gaming Control Board investigation into the matter is continuing. The board is expected to recommend a fine in the millions of dollars against Mirage owner MGM MIRAGE. The fine must receive final approval by the Nevada Gaming Commission. A date for that vote hasn't yet been set.
The investigation has so far determined that the Mirage failed to file nearly 15,000 cash transaction reports over about 18 months. The reports are required of cash transactions of $10,000 or more and are aimed at combating money laundering. The documents had been filled out properly but had not been mailed to the Treasury Department's financial crimes unit, the Gaming Control Board found.
Morishita was terminated after MGM MIRAGE discovered the matter and reported it to the Gaming Control Board. He had been employed at the Mirage since 1996.
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