High roller's paradise lost to debts, fraud case
Omar Siddiqui was well-known on the Strip. Casinos competed to lure the high-stakes San Francisco Bay Area gambler to their tables. They flew him on...
Los Angeles Times
LAS VEGAS — Omar Siddiqui was well-known on the Strip.
Casinos competed to lure the high-stakes San Francisco Bay Area gambler to their tables. They flew him on private jets. They put him up free in opulent suites. And they extended him millions of dollars in credit on his signature alone. He was good for business.
Siddiqui, 43, who made $225,000 a year as a top Fry's Electronics executive, once lost $8 million in a day.
It was not his only debt — or even his largest. Court records indicate he gambled away as much as $167 million at casinos in the past decade. Yet, even as he amassed huge IOUs, casinos continued to lend him millions more.
The debts ultimately caught up with Siddiqui, and he now is accused of masterminding one of California's biggest frauds. His case provides a view into the rarefied world of big-time gamblers and the lengths casinos go to attract them.
"He was playing about as high as you can get," said Marcia Hartman, a former Las Vegas casino employee who said she saw Siddiqui in action. "That's what the casinos are looking for. They are going to give a big player, a whale, anything in the world he wants. From an ego point of view, he soaked it up."
Siddiqui's high-wire act began to unravel in October. A colleague went into his unoccupied office and found spreadsheets detailing millions of dollars in secret payments that Siddiqui allegedly received from companies that sold products to Fry's.
The co-worker scooped them up and took them to the Internal Revenue Service.
On Dec. 19, two dozen federal agents descended on Fry's corporate offices in San Jose, Calif., and marched Siddiqui away in handcuffs.
Siddiqui, the IRS contends, financed his gambling by taking at least $65.6 million in kickbacks. Charged with nine counts of money laundering and wire fraud, he faces 140 years in prison.
Fired by Fry's, the onetime computer salesman pleaded not guilty last month. He has declined to comment.
Hartman and other gaming-industry critics say the casinos are complicit for letting Siddiqui play far beyond his means.
"They built their own outlaw," said Hartman, also a former high-stakes gambler who wound up in debt and facing prosecution. "They coveted him. They coddled him. They gave him the tools to become what he is. They gave him so much credit his alternative was to go to jail or to steal. Either way, you go to jail."
Casino representatives say it's not their responsibility.
"If a person has a million or 2 million in his account, how are we supposed to know where it came from?" asked Yvette Monet, a spokeswoman for the MGM Grand, which owns several casinos frequented by Siddiqui. "It could be money he inherited from his mother."
Phony company alleged
It is unclear when Siddiqui, Fry's vice president of merchandising and operations, allegedly began receiving kickbacks.
The IRS says he persuaded the company to let him bypass independent brokers who usually supply products, then demanded that vendors pay him commissions as high as 31 percent through a "fraudulent company" he set up in 1998. The sole purpose of PC International was to receive kickbacks, the IRS charged.
According to the criminal complaint filed by U.S. Attorney Joseph Russoniello, Siddiqui deposited at least $167.8 million in PC International's bank account between 2005 and 2008. The IRS alleges that $65.6 million came from five vendors. It is still investigating where he got the rest.
The allegations came as a shock to owners of Fry's, who had thought so highly of their longtime employee that they had given him one of their top jobs — and lent him $10.1 million.
"He has a strong ability to persuade," said spokesman Manuel Valerio, who worked in Fry's corporate offices with Siddiqui. "He carried himself as a confident individual, a businessperson with acumen."
Days after Siddiqui's arrest, the privately held company sued to get its money back. Valerio declined to discuss details of the loan.
Millions in debt
Short and balding, Ausaf Umar Siddiqui — who goes by Omar — was an immaculate dresser fond of expensive suits. He owned a Ferrari, a Mercedes and a Palo Alto town house. But there were signs something was amiss.
Although Siddiqui may have won millions at the tables, at least seven casinos in Las Vegas, New Jersey and Connecticut have sued Siddiqui since 1999 seeking to recover at least $33 million.
The district attorney's office in Clark County, Nev., prosecuted him in 2003 for not paying $12 million in gambling debts. Before his arrest, Siddiqui was paying restitution and had whittled his debt to $6 million, said Chief Deputy District Attorney Bernard Zadrowski.
But now, without money to make payments, Siddiqui faces reinstatement of felony charges.
"In terms of cases we prosecuted, he's one of the bigger ones," Zadrowski said. "He is in the top four or five in terms of the dollar amount."
In 2006, the IRS slapped an $18.5 million lien on his property for unpaid taxes. California filed a $3 million lien last year.
Gambling in luxury
At the Venetian casino in Las Vegas, an executive said Siddiqui often stayed in a lavish Chairman Suite. The 7,000-square-foot unit has a fountain by the front door, expensive art on the walls, four bedrooms, huge walk-in closets, a fitness room, a salon, 24-hour butler service and 26 television screens.
Near the suites, the Venetian provides a private gambling lounge for high rollers. Guests are served wine worth as much as $25,000 a bottle. Siddiqui preferred to gamble in the Salon, a semiprivate area on the main floor.
"His game was blackjack," said the executive, who did not want to be identified discussing a customer. "He would bet $200,000 a hand, and he liked to play quick."
The casinos keep a detailed profile of important guests, noting their desires and quirks, and assign each a personal host.
Casinos have been known to take them on shopping sprees, buy them a BMW or fly them to Hawaii or Paris by private jet. One high roller commented on how much he liked the bed in his suite; the casino loaded it onto a plane and sent it home with him. Another alleged in a lawsuit that a casino provided alcohol, drugs and prostitutes to entice him to borrow and lose millions.
"You feel like you are the king," said one Vegas high roller who asked not to be identified. "There is nothing the casino won't do for us. Most of the time, we don't even need to ask and things will happen for us."
For a casino, it's smart business. The strategy is to build loyalty with high rollers, since virtually every gambler eventually loses.
It also makes sense for a casino to extend credit to a player who is deep in debt. Some gamblers will sacrifice their businesses, even their homes, to pay off their debts so they can keep playing.
If the casino loses money it has lent, it is only paper, said attorney Eric Sidebotham, who represents Siddiqui and other gamblers.
"When the casino issues credit, it's monopoly money," he said. "They give you chips and you lose them at the table. The money never leaves the building."
Siddiqui maintained his extravagant habit for years, frequently signing "markers" — akin to personal checks — but often chasing his debts, court documents show.
"He had markers all over town," said Hartman, the former Las Vegas casino employee. "When you are losing, you are jumping around to any casino that will give you credit and trying to come up with a winner to pay a marker at another casino. It's exhausting."
Hartman was working at the Golden Nugget in Las Vegas in 2004 or 2005 when Siddiqui came and asked for credit. Despite his record of debts, which casinos can track easily, the Nugget gave him $1 million.
He played blackjack and hit a losing streak. But when he bet his last $50,000, his luck turned. He won back the million and more.
"He took his few million and walked out and used the money to pay back another casino," she recalled. "You can imagine how unhappy the casino was to see all their money walk out and into someone else's vault."
A Golden Nugget spokesman denied knowledge of the incident.
$8 million lost in a day
On Nov. 15, 2007, Siddiqui walked into Planet Hollywood in Las Vegas, wrote a $3 million check for chips and sat down to play baccarat, bypassing the beautiful blackjack dealers in lingerie.
His luck soured, and he wrote another check — this one for $5 million. He lost his stake within hours.
When Planet Hollywood tried to collect, Siddiqui's checks bounced. The casino sued him in June, and he agreed to settle by paying an undisclosed amount.
Less than three weeks before his arrest, the Palms casino in Las Vegas sued him, alleging he owed more than $2.3 million after he had signed seven markers on Aug. 23.
The lawsuit names more than a dozen casinos where Siddiqui was known to play and protests that "it is reasonable to believe that Mr. Siddiqui will dispose of assets by gambling away his money."
Copyright © 2009 The Seattle Times Company
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