Federal investigators now say more than $40 million from the failed Oakwood Deposit Bank Co. in Paulding County went into casino-ship operations in Florida and South Carolina.
Documents released yesterday by the Internal Revenue Service upped the ante: Until now, bank regulators had said $15 million of an alleged $48 million embezzlement had been diverted to the floating casinos.
On Tuesday, several casino ships and records in offices of Stardancer Casino, Inc., and related companies, were seized by the IRS and other federal agencies in Myrtle Beach, S.C., and in the Florida cities of Tampa, Port Richey, and Madeira Beach, Fla.
The Oakwood bank and its Grover Hill, Ohio, branch were closed Feb. 1 of last year by federal and state regulators. At the time, an FBI affidavit claimed that Mark Steven Miller, former executive vice president and chief executive officer of the small bank, had confessed to embezzling $40 million, of which $15 million was turned over to the gambling enterprises.
However, Mr. Miller, 47, entered a not guilty plea in U.S. District Court in Toledo and remains free on a $1 million property bond. Late last year, federal prosecutors amended the indictment, alleging that the embezzlement amounted to $48 million. Mr. Miller is accused of embezzlement charges that could bring sentences totaling 30 years if convicted and money-laundering charges that could add another 20 years. Fines could total $1.5 million.
The latest 46-page government document - filed Monday in federal court in Tampa, Fla. - included an affidavit by Jeffrey Paul, an IRS special agent in Toledo. Mr. Paul's statement said that the Stardancer records should show evidence of federal crimes committed by Samuel Gray, Sr., president of the casino operation, and his wife Marilyn, secretary-treasurer. The affidavit alleged that the Grays were involved in mail fraud and false billings for travel expenses that disguised purchases of furniture for their home in Gulfport, Fla.
The search warrant supplements an order earlier this month by U.S. District Court Judge David Katz in Toledo that directed the seizure of nine Stardancer Casino bank accounts and six vessels, including the Stardancer and StardancerIV casino ships in Florida. The search warrants also cover offices in Myrtle Beach and Little River, S.C., and other properties in several Florida cities.
Mr. Paul's affidavit says that Stardancer received $40.4 million from 1998 to early 2002 - including $21.7 million sent directly to the casino operation through 52 cashier's checks, and $18.7 million sent to third parties on behalf of Stardancer. And it said the funds were used to purchase boats, casino equipment, and real estate, and to pay the casino's expenses.
The federal filing also claimed that the Stardancer operation is owned by at least nine people - including the Gray couple; Mr. Miller and his brothers, Gregory and Jeff, through a company called San-Lor, Inc.; two men from Alabama, and two others who are described as either friends or relatives of the Grays or the Millers.