Judges tore into Nevada authorities in two separate recent cases for elaborate, unconstitutional stings over big money civil forfeiture arrests.
Paul Phua and Straughn Gorman would appear to have little in common.
When last seen Phua was departing Las Vegas in his $48 million Gulfstream. He’s a Malaysian businessman and high-rolling gambler with reputed ties to a Hong Kong criminal triad. Phua has denied any criminal associations, and his defense attorney David Chesnoff calls such assertions “garbage.”
Gorman, meanwhile, presumably left Nevada from behind the wheel of his ransacked recreational vehicle. He lists a Hawaii beach shop as his place of employment, but authorities suspect he also traffics marijuana. All it lacks is evidence.
Against formidable odds, both men managed to beat the House in Nevada in two high-profile federal cases that now have prosecutors and law enforcement feeling a little heat—over searches for drugs and dirty money that judges say never should have happened.
Phua was the alleged ringleader of a World Cup soccer betting operation that in 2014 half-cleverly set up shop in the high-roller villas at Caesars Palace when the FBI and Nevada gaming authorities came calling.
In the ensuing months, the government linked Phua and the betting ring to Wo Hop To gang leader Cheung Chi-tai, whose violent reputation and connection to Macau’s lucrative VIP gambling salons menaces more than one Nevada gaming corporation these days.
Cheung was identified in a 1992 U.S. Senate Permanent Subcommittee on Investigations as one of nine Wo Hop To leaders. Cheung was linked to (but not charged with) a vicious beating of a Macau casino dealer in 2011. One of his associates was charged and convicted in the assault.
A passport with Cheung’s name on it was recovered during the search of the high-roller villas.
But as it turns out law enforcement’s investigation of the betting ring was also too clever by half. Cops cut off the Internet service to the Phua group’s villas, then sent in FBI agents disguised as technicians to scout the premises—in effect to gather evidence without a warrant for their case.
What investigators saw resembled a standard sports betting “wire room” replete with eight computers and 20 monitors. Phua’s operation was said to have handled approximately $13 million in illegal bets before the FBI came calling on July 13 of last year.
During the preliminary phase, U.S. Magistrate Judge Peggy Leen called the law enforcement investigation strategy “fatally flawed” and questioned whether the government had probable cause before seeking a search warrant. She also determined material statements made by FBI agents in the case were “false and misleading.”
Although six of eight suspects pleaded guilty to dramatically reduced charges and received probation, Phua pressed his bet. Represented by veteran defense attorneys Chesnoff and Tom Goldstein, Phua watched as much of the evidence against him was thrown out by U.S. District Judge Andre Gordon.
“It’s a system where it’s about money and not about justice.”
“Permitting the government to create the need for the occupant to invite a third party into his or her home would effectively allow the government to conduct warrantless searches of the vast majority of residences and hotel rooms in America,” Gordon said during an evidentiary hearing.
On June 1, Gordon dismissed the case. Another month passed before U.S. Attorney Daniel Bogden said his office disagreed with Gordon’s legal reasoning, but it declined to appeal the case.