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A $65 million fraud allegedly committed against the giant San Jose company Fry's Electronics by senior exec Ausaf Umar Siddiqui (43) last year apparently triggered a visit to Las Vegas casinos by Internal Revenue Service investigators this week.
San Francisco's Mercury News reports that agents seized financial records and interviewed employees from at least one Las Vegas casino last week, visiting the Venetian, a casino and hotel along the Vegas Strip.
A government spokeswoman confirmed the visits, and said that it was believed that Siddiqui had frequented the venue. She declined further comment, saying the search warrants have been sealed.
Mercury News recapped the story that Siddiqui was charged in mid-December on allegations that he was part of a $65 million kickback scheme, where he supposedly charged vendors exorbitant fees to place their products on Fry's shelves, and pocketed the money to pay off huge gambling debts. He was formally charged in January on nine counts of wire fraud and money laundering. The Palo Alto resident is on house arrest and is scheduled to appear in San Jose's federal court Wednesday morning.
John Beckmann, a "casino host" at the Palms Casino who looked after Siddiqui, told the Mercury News in an exclusive interview that he was questioned for "a couple of hours" by two IRS agents last Wednesday afternoon.
"They wanted to know, 'How did Omar pay you?' " Beckmann said he told the agents that on a "couple of occasions," Siddiqui would call him up and say, "meet me at the Venetian." Then, Siddiqui would hand Beckmann a check from the Venetian for anywhere from $1.5 million to $2 million written out in Siddiqui's name. Siddiqui would sign the check over to the Palms, and Beckmann would run the check up to the administrative offices. The Palms is suing Siddiqui for $2.35 million stemming from an August gambling spree.
"That's not common at all," Beckmann said. "Why would the Venetian do that? That's the million dollar question."
Venetian spokesman Ron Reese declined to comment.
But David Schwartz, director of the Gaming Studies Research Center at the University of Nevada-Las Vegas, said sometimes a high-roller will have credit at a particular casino. So, instead of writing a winner a check for $2 million, the gambler may just keep the winnings at the casino for future use.
Beckmann said the Palms was served with a subpoena for all the gaming records involving Siddiqui. He also said IRS agents had subpoenas for several other casinos. Beckmann said he saw the name "Planet Hollywood" on a subpoena.

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