Monday, Feb. 2, 2009 | 2 a.m.
Law enforcement authorities last week turned up the heat on a high-rolling former Fry’s Electronics vice president accused of defrauding the national retailer out of more than $65 million to pay off his Las Vegas gambling debts.
On Thursday, Internal Revenue Service agents from Oakland, Calif., executed search warrants at the Venetian — where 42-year-old Ausaf Umar Siddiqui gambled away millions of dollars. The agents were looking for records of his dealings with the Strip resort and property he might have kept there, sources said.
The raid, sources said, was part of an effort to determine the origin of the money Siddiqui used to pay off his massive gambling debts. Authorities want to know whether he used money that came from his alleged scheme at Fry’s.
Agents also were in town looking for other records related to their criminal investigation of Siddiqui, the sources said.
Siddiqui, who was based at Fry’s headquarters in San Jose, Calif., was indicted last month on federal wire fraud and money laundering charges in what authorities allege was an elaborate scheme to obtain $65.6 million in kickbacks from the company’s vendors. Siddiqui, according to a December criminal complaint, used a large portion of that money to pay subsidiaries of Las Vegas Sands Corp., which owns the Venetian.
IRS agent Arlette Lee, a spokeswoman for the agency’s Oakland field office, which is spearheading the Siddiqui investigation, confirmed that Oakland agents conducted searches at the Venetian last Thursday, but she would not discuss why they were there. The Venetian did not respond to a request for comment.
The IRS raid came as the Clark County district attorney’s bad check unit prepared to move forward with a felony case against Siddiqui stemming from a Sept. 16, 2003, complaint alleging that he failed to pay Caesars Palace $10.4 million in gambling markers. The complaint also alleged Siddiqui owed Binion’s Horseshoe $1.5 million in markers in 2003, but that debt was later paid, closing that part of the case. Unpaid gambling markers are treated as bad checks in Nevada.
Chief Deputy District Attorney Bernie Zadrowski, who runs the bad check unit, said he’s proceeding with the local criminal case against Siddiqui because Siddiqui missed a $150,000 quarterly payment to Caesars Palace in December following his arrest on federal charges.
Siddiqui, who still owes Caesars Palace $5.7 million, had agreed to the quarterly payment plan in October 2006, Zadrowski said.
“We’re planning to inform the court that he’s in violation of his restitution agreement with Caesars Palace,” Zadrowski said.
And word surfaced late last week that Zadrowski may be opening a new criminal case against Siddiqui.
Last month the Hard Rock Hotel asked that Siddiqui be prosecuted for failing to pay a $1 million gambling marker he received from the resort on Sept. 7, sources said.
Zadrowski would not comment on whether the Hard Rock was seeking prosecution of Siddiqui.
Siddiqui’s Las Vegas criminal attorney, Dan Albregts, also declined to comment on the Hard Rock and the other developments last week affecting his client.
Zadrowski confirmed that Albregts informed him Friday that his client no longer has any assets to pay his debts.
That could make it difficult for Siddiqui to avoid his court troubles here.
Over the past several years, Siddiqui has amassed gambling debts at other Las Vegas casinos, including the MGM Grand. In 2003, the casino filed suit against Siddiqui to collect markers, but the case was dismissed in 2004 following a settlement.
In December, the Palms sued Siddiqui, alleging he owed the casino $2.35 million from an August gambling junket.
He also has accumulated gambling debts in New Jersey and Connecticut, the San Jose Mercury News reported.
Jeff German is the Sun’s senior investigative reporter.