Wynn Resorts Allegedly Failed to Investigate Gambler’s Source of Funds

Posted on: October 10, 2024, 10:32h. 

Last updated on: October 10, 2024, 10:39h.

Devin O'Connor @CasinoorgDevinO Read More

Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Wynn Resorts has been named in a lawsuit filed in Ontario’s Superior Court of Justice on allegations that the company’s Las Vegas casinos failed to know their customers and determine a player’s source of funds.

Plaintiff Stephen Shefsky, president and CEO of James Bay Resources, a Toronto-based oil and gas exploration firm, says he invested $4.6 million in a cannabis startup in early 2017. Shefsky alleges that much of his invested funds in CB Holdings Group and California Ventures Corp., entities registered respectively in Nevada and California, were instead gambled inside Wynn and Encore Las Vegas.

Wynn hasn’t yet responded to the litigation. It’s unclear if the casino filed Currency Transaction Reports or Suspicious Activity Reports linked to Bunevacz’s play. 

Defendant in Prison

In March 2017, Bunevacz pleaded guilty to two felony counts of selling securities without qualification in California state court. The court agreed to a suspended sentence contingent on Bunevacz paying a total of $273K in restitution to two victims.

Bunevacz allegedly paid the victims back, at least in part, using other investors’ money. Shefsky alleges that Bunevacz then continued with his Ponzi scheme operating under CB Holdings and California Ventures.

Shefsky’s complaint alleges that Bunevacz gambled extensively and lost around $3.8 million at the Wynn casinos between January 2018 and June 2019.

“Wynn failed or neglected to make any such inquiries and instead willingly and blindly engaged in transactions with Mr. Bunevacz,” Shefsky’s attorneys wrote.

Wynn permitted or encouraged the Bunevaczs to spend money at Wynn’s hotel and casino, the amount and particulars of which are known to Wynn and are not known to the plaintiffs,” the complaint continued. “Had Wynn complied with its statutory and common law obligations vis-a-vis Mr. Bunevacz, it would have developed reasonable suspicion that the funds being gambled and spent by the Bunevaczs were the proceeds of fraud.”

In April 2022, the Securities and Exchange Commission filed a complaint against Bunevacz and his stepdaughter Mary Bunevacz on allegations that the two were engaged in securities fraud and a Ponzi scheme. Bunevacz was sentenced to 17.5 years in federal prison and ordered to pay more than $35.2 million in restitution.

Federal prosecutors believe Bunevacz and his daughter bilked investors out of more than $45 million.

Criminal Targeted Friends

The US Attorney’s Office for the Central District of California says Bunevacz duped investors by promising lofty returns and a unique entry to the fast-growing cannabis industry. Bunevacz “preyed on individuals who believed he was their friend” and talked about having ins with Chinese manufacturers who had created a state-of-the-art vape pen that “renders the vape flavoring smooth.”

“The sense of violation, the assault on personal dignity, and the lasting trauma [Bunevacz] has caused are very much reminiscent of the harm typically associated with violent crimes,” federal prosecutors argued in a sentencing memorandum. “With well over a hundred victims, [Bunevacz] caused these harms at a scale rarely seen.”

Shefsky is seeking restitution and financial damages through a jury trial in Toronto.