Things are heating up for casino mogul Steve Wynn over the planned waterfront Wynn Resort, in the City of Everett near Boston, Massachusetts. On Wednesday, U.S. District Court Magistrate Marianne Bowler heard arguments over allegations that private investigators working for Wynn Resorts gained unauthorized access to files in a joint state and federal criminal probe. The judge took the arguments under advisement and is expected to decide whether to hold a hearing on the allegations as requested by defense lawyers for former owners of the waterfront property where Wynn wants to develop a $1.7 billion casino.

U.S. Attorney, Carmen Ortiz is prosecuting Charles Lightbody, Dustin DeNunzio and Anthony Gattineri, former owners of the waterfront property in Everett, for withholding information from Wynn. It is alleged that the three failed to make it known to state gambling investigators and Wynn that Lightbody was a convicted felon with mob ties who looked to make money from the lucrative deal with the casino mogul. All have been charged with wire fraud. According to defense attorneys if there is evidence and it’s proven that Wynn knew about Lightbody, his license may be in jeopardy. Convicted felons are not able to benefit from casino development.

In federal court yesterday, a motion hearing attacking the government’s case focused on defense claims that after Gaming Commission investigators, who by coincidence are also state police, told Wynn that Lightbody stood to profit from the land sale, two former state troopers, Joseph F. Flaherty and Stephen G. Matthews, accessed a secret government “wire tap room.”

Gattineri’s defense attorney, Michael Connolly, told Judge Marianne Bowler the AG wiretap room is “absolutely off-limits to the public,” and any access to it by retired state police “raises very serious questions about the integrity of the Massachusetts State Police investigations” into Wynn’s background, and whether Wynn was complicit in a cover-up to preserve its development. Flaherty admitted in an affidavit that although he did do some work for Mintz Levin, Wynn’s law firm, on behalf of Wynn in March of 2014, it was unrelated to casinos or gambling, and he does not know where the “wire room” is.

Mintz Levin chairman, Robert Popeo, said that sometimes it’s helpful to hire private investigators on behalf of their clients, and that it’s not always necessary to inform the client of the investigative work in advance. He added, “When hiring Joe Flaherty for a limited project for Wynn Resorts, there was no need to make Wynn Resorts aware of his retention.”

The cities of Boston, Revere and Somerville, have filed civil lawsuits challenging the state’s decision to award Wynn the Boston-area license last fall. Boston, in particular, argues that the “wiretap room” review is further proof that the licensing process was compromised.

The casino is expected to be the most lucrative gambling operation in the state when it opens in 2017.

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