Guam Shrine Club, the nonprofit organization that was authorized to conduct the Hafa Adai Bingo games for charity, has come under fire as allegations of illegal gambling, conspiracy and money laundering have been levied against three GSC officers and four other individuals in the District Court of Guam.
Jose Arthur Chan, past GSC president; Alfredo Leon Guerrero, past president until December 2018; and Richard Brown, secretary and vice president, were allowed to operate the bingo games to raise funds to assist children with transportation to the Shriners Hospital for Children in Hawaii for medical care. They are accused, however, of conspiring to “unjustly enrich themselves” along with Michael Marasigan, owner and operator of Ideal Ventures; Christine Chan, spouse of Jose Arthur Chan and owner of Nanan Bray; Juanita Capulong, common-law spouse of Leon Guerrero; and Minda San Nicolas, owner of TSAC Ventures and sister of Capulong.
Gambling is illegal on Guam with the exception of certain organizations conducting bingo games for charity. Hafa Adai Bingo was established by the Guam Shrine Club and authorized by the Guam Department of Revenue and Taxation to conduct charitable gaming.
To maintain its status as a nonprofit, the organization was supposed to file a Return of Organization Exempt from Income Tax-Form 990 every year. That, however, didn’t happen.
It is alleged that some time between March 2015 and Dec. 31, 2021, the seven individuals conspired to operate an illegal gambling business under the guise of charity – namely, bingo games sponsored by the Guam Shrine Club under Hafa Adai Bingo’s nonprofit status and gaming permits.
According to the indictment filed with the District Court, “it was the object of the conspiracy for the defendants to unjustly enrich themselves and others by operating an illegal gambling business under the guise of charitable and civic fundraising.”
Total revenues ‘falsely reported’
Part of the conspiracy allegedly involved GSC officers filing income tax forms that misrepresented the organization’s revenues.
“It was further part of the conspiracy that defendants Alfredo Leon Guerrero, Art Chan and Richard Brown were authorized signatories on various GSC bank and credit union accounts which they used to pay profit distribution checks to co-conspirators and pay expenses incurred by co-conspirators from funds derived from illegal gambling,” the indictment states.
About $34,000,000 in bingo proceeds was deposited into various GSC bank and credit union accounts.
“On or about March 12, 2015, during a GSC executive council meeting, defendants … falsely represented that Marasigan would act as a consultant when the GSC hosted bingo fundraisers, when in fact, as Leon Guerrero, Art Chan, Brown and Marasigan well knew that Marasigan and others would conduct, finance, manage, supervise, or direct the GSC’s bingo fundraising activities,” court documents state.
Roughly three months later, Leon Guerrero, Jose Arthur Chan and Brown opened a GSC checking account with BankPacific, the same day a merchant processing agreement was also made with Affinity Solutions for Vantiv and Worldpay LLC to process GSC fundraising/bingo payments.
In April 2016, the three GSC officers reportedly opened a Hafa Adai Bingo checking account at Coast 360 Federal Credit Union that authorized Marasigan to receive account information.
In June 2016, the three GSC officers executed a five-year bingo sponsorship agreement with an individual, identified by the initials W.S.M., to conduct bingo games at the Guam Greyhound Park in Tamuning, according to court documents.
A secondary account was opened at Coast 360 in July 2017 by Leon Guerrero and Brown, while Art Chan opened a GSC account at Bank of Guam in February 2020.
Despite the financial activity, court documents stated that the GSC officers “falsely reported total revenues” on the annual tax Form 990.
The last form was filed in 2019, which was signed by Art Chan, reported $153,880. Court documents indicated that no form was filed in 2020 or 2021.
“On or about June 14, 2021, defendant Art Chan signed and caused to be filed GSC’s amended 2019 Form 990 that reflected total revenues in excess of $1 million,” court documents state.
That did not match up with the merchant copy that processed GSC’s bingo and fundraising payments.
According to Form 1099-K, which reports the gross amount of payment from card and third-party network transactions annually reported, in 2019 there was $5,820,546.79 in transactions.
In 2020, the report showed $2,158,952.48 and in 2021 showed $7,050,182.99 in transactions.
Count two of the indictment alleges that the GSC officers, along with Marasigan, Leon Guerrero, Christine Chan, Capulong, and San Nicolas, colluded to illegally profit from the gambling.
W.S.M allegedly received over $2 million in bingo proceeds. Marasigan and Ideal Ventures received over $15 million.
“Between January 2018 to on or about October 22, 2021, defendant Marasigan wrote and issued checks, drawn from his and Ideal Ventures LLC’s bank accounts, made payable to Christine Chan, Nanan Bray, Juanita Capulong, Minda San Nicolas and TSAC Ventures as part of their return investment,” court documents state.
Capulong received over $600,000, San Nicolas received over $700,000 and Christine Chan received over $1 million.
All seven individuals were charged in the District Court with conspiracy to operate illegal gambling business, money laundering conspiracy and money laundering.
Court appearances
Following their charges, Marasigan was the first to make his appearance in court June 14, where he pleaded not guilty to the charges before Magistrate Judge Michael Bordallo.
Jose Arthur Chan, Christine Chan, Capulong, San Nicolas and Brown pleaded not guilty the next day, and Leon Guerrero pleaded not guilty June 21, according to federal court records.
The defendants were all placed on conditional release pending their trial, which is scheduled to start Aug. 29.