Racketeering lawsuits alleging illegal gambling filed against midstate stores

Bibb County prosecutors filed racketeering lawsuits Tuesday against three convenience stores and their operators, alleging illegal gambling violations and that the stores made false reports to a state agency.

One suit names Soon H. Cha, Cha Super — also known as Lizella Supermarket — at 3309 Holley Road, Lizella, and Cha Food Mart — also known as Shell Food Mart — at 2700 Riverside Drive, Macon, as defendants.

The other complaint names Myoung Park and Poplar Mart, at 565 Poplar St. in Macon.

The GBI arrested Cha on charges of racketeering, two counts of commercial gambling and evading currency transaction report requirements, and Hung Park and Myoung Park on commercial gambling charges.

Authorities served search warrants at the three stores and a residence Tuesday, according to a GBI release. A satellite office of one of the businesses was also searched, but District Attorney David Cooke said he could not release additional details on it.

In both lawsuits, prosecutors asked a judge to freeze the stores’ assets and for a receiver to be appointed to manage them. Prosecutors also are seeking to have the assets forfeited.

A judge signed orders Tuesday freezing the stores’ assets and appointing a receiver to manage them.

“We’ll ultimately be seeking forfeiture of those things that were used to facilitate any crimes, and we’ll be seeking to recover any fruits of the crime,” Cooke said during a news conference Tuesday afternoon.

Here are allegations in the lawsuits:

The stores operated gambling machines equipped with several ways to win without requiring skill, and the stores illegally redeemed winners’ credits for cash. To be legal, an element of skill is required for the games, and cash payouts are prohibited. Winnings can be legally redeemed for store merchandise, gas or lottery tickets.

“What they’re not allowed to do is to pay out in cash and essentially turn them into slot machines,” Cooke said. “Once these machines are used in a commercial gambling enterprise, that’s when it becomes illegal.”

Although the stores are “purported convenience stores,” they were operated as “minicasinos.”

Between October 2013 and June 2015, the stores were required to self-report the amount of money played and the net profits to the state.

During that time, Cha Super and Cha Food Mart reported that customers played a little more than $3 million, or $214,554 monthly. The stores reported that they paid out about $2.8 million in winnings, or $204,421 monthly.

Poplar Mart reported customers about $213,554 monthly, and paid $36,785 monthly in winnings.

Beginning July 1, 2015, though, the machines were connected to a central computer system that automatically recorded the amounts played and the winnings.

The system recorded players at Cha Super and Cha Food Mart inserted more than $16 million into the machines between July 1, 2015, and May 2017, or about $705,000 monthly. During the same time period, the central computer system recorded that customers won about $11.3 million.

Net profits for the 23-month period were about $4.8 million, compared to the $141,864 from the last 23-month self-reporting period.

Based on the discrepancy in the figures, prosecutors allege that the stores submitted false reports to the state during the self-reporting period and that they filed false tax returns.

Between April 2014 and May 2017, customers at Cha Super and Cha Food Mart played $25 million and were paid $17 million in winnings. No use or sales tax was paid on the winnings, meaning the stores owe more than $1 million in unpaid taxes, prosecutors contend.

The computer system recorded that Poplar Mart customers inserted about $1.2 million into the machines, or about $53,621 monthly between July 1, 2015 and May 2017 and were paid $910,859.

Net profits reported by the central computer system totaled $322,429 as compared with $178,091 reported in the last 23-month self reporting term.

In the last three years, customers have fed $2 million into the Poplar Mart machines and been paid $1.4 million in winnings. No use or sales tax was paid on the $1.4 million, meaning the store owes more than $100,000 in unpaid taxes, prosecutors contend.

In obtaining required licenses to operate the gaming machines, the stores filed false reports swearing that they were not delinquent in paying taxes, prosecutors say.

The raids and lawsuit were filed about a month after the principal owner of Forest Park-based Sudama Resorts LLC agreed to forfeit $1.6 million from an illegal gambling suit filed in 2015 in Bibb County.

Sandip Patel, 41, pleaded guilty to three counts of commercial gambling and was sentenced to one year on house arrest followed by four years on probation.

The 2015 lawsuit included convenience stores across the state — including Bibb County — and still is pending.

Settlements in the case so far total about $3.2 million.

This story was originally published June 13, 2017 at 1:25 PM with the headline "Racketeering lawsuits alleging illegal gambling filed against midstate stores."