Corruption in Mexico casinos takes a toll in the US, too

WATERSMEET, Mich. ? Hard times have been a constant for most members of the Chippewa Indian tribe known as the Lac Vieux Desert Band.

Nestled in a wooded corner of Michigan?s Upper Peninsula, the tribe owns a modest casino, a hotel and a golf course. But the complex is far off the beaten path for tourists or gamblers, and many of the tribe?s 600 or so members find steady work as unlikely as winning a jackpot.

So when a Mexico casino czar named Juan Jose Rojas-Cardona sent an offer to invest in Mexico?s booming gambling industry, it seemed like a godsend.

But rather than a big payout, the disadvantaged Lac Vieux tribe got swindled. Its multimillion-dollar "investment" disappeared, adding the tribe to a list of victims that includes a mammoth hedge fund in London, an Australian manufacturer of gaming machines, an Arizona investor and two Mexican textile tycoons.

Rojas-Cardona, however, has gone on to build one of the biggest gambling empires in Mexico. Relying on a silky sales pitch and apparent close connections to Mexico?s top politicians, perhaps including presidents, Rojas-Cardona now holds 60 permits to operate casinos in Mexico ? even though gambling remains technically illegal in that country.

A horrendous act of violence on Aug. 25 first exposed the dark underside of Mexico?s casino industry when gangsters firebombed the Casino Royale in Monterrey, Mexico?s industrial northern hub, killing 52 people. Those arrested later confessed that they were pressuring the casino owners for payoffs on behalf of Los Zetas, one of Mexico?s two biggest crime groups.

But a McClatchy Newspapers probe in the months since has found evidence that the corruption in Mexico?s gambling industry goes much deeper than a shakedown by drug gangs. Indeed, the entire industry appears to be deliberately opaque, designed by political barons as a way for them to hand out licenses as favors, tap casino coffers for cash, and let casino operators flout the law.

The Mexican system is so corrupt and unregulated that U.S. casino companies refuse to enter the Mexican market. That, however, has not kept Americans from being victims of the corruption.

It?s unclear what, if anything, the U.S. government has done to warn investors of the risks or to help prosecute alleged scammers such as Rojas-Cardona, whose criminal record in the United States includes the dismissal of a drug charge in New Mexico.

Rojas-Cardona?s life in Mexico includes a near assassination in 2007 that was laid to drug barons or rival casino operators.

Ironically, gambling in Mexico has thrived under the National Action Party, or PAN, which swept into power in 2000 promising an end to the corruption and cronyism that had flourished in Mexico during the long reign of the Institutional Revolutionary Party, or PRI. The PAN?s candidate in 2000, Vicente Fox, was the country?s first non-PRI president in more than 70 years, and his successor, current President Felipe Calderon, a fellow PAN member, won the post in 2006 in one of the most closely contested races in Mexico?s history.

In a dizzying inconsistency, Fox?s government in 2004 issued regulations that essentially ignored Mexico?s 1947 law that bans gambling. Even though that law remains in effect, Mexico?s Supreme Court allowed the new regulations to go forward. In the ensuing years, first Fox?s administration, and then Calderon?s, issued licenses allowing 867 gaming venues, permitting some bingo, sports betting and slot machine parlors to expand into poker, roulette and craps without explicit legalization.

Calderon?s office declined to comment on whether the president knew Rojas-Cardona.

Hundreds of full-fledged casinos now dot Mexican cities, and scores, if not hundreds, more operate off the books or under court protection from friendly judges who provide legal relief. Politicians balk at enacting new laws legalizing the current situation for fear that under-the-table payments may dry up and that global gaming companies could move in and dominate.

Mexican political barons draw on the casinos as if they were "petty cash boxes," said Lizbeth Garcia Coronado, a member of Mexico?s Chamber of Deputies and the coordinator of the chamber?s working group on gambling. "But it?s not ?petty.? The casinos generate a lot of money."

Mexican regulators couldn?t seem to bend the rules fast enough once they were in place. For example, Mexico?s assistant general director of gaming and lotteries, Roberto Correa Mendez, issued permits for 41 new casinos on the day he quit in 2009.

Source: http://feedproxy.google.com/~r/bostonherald/news/~3/Eb7K_jdbpS8/view.bg

alot alot are you afraid of the dark are you afraid of the dark dallas news google tv cornel west