Bibb County DA files suit alleging illegal gambling, RICO violations across midstate

Bibb County's district attorney filed a lawsuit Wednesday alleging racketeering and illegal gambling violations involving 85 convenience stores, 69 people and a corporation that owns more than 600 gambling machines at 100 locations across Georgia.

The stores are located in 31 counties, including Baldwin, Bibb, Crisp, Hancock, Houston and Macon counties in Middle Georgia. Ten of the 26 Middle Georgia stores are in Bibb County.

The GBI announced Wednesday that authorities had served 16 search warrants at one home and 15 stores in six counties, including Bibb and Houston.

Agents collected evidence and assets related to alleged illegal gambling following an investigation revealing that customers were receiving cash payouts for winning credits, according to a GBI statement.

Georgia law prohibits such cash payouts. Stores are allowed to pay winners only in store credit that can be used for merchandise, gas or lottery tickets. Redemptions for alcohol and tobacco products are prohibited.

Local stores raided included: Shell Food Mart, 6230 Zebulon Road, Macon; T&A Food Mart, 1477 Pio Nono Ave., Macon; Papa's Market, 2017 Millerfield Road, Macon; Shurling Stop, 2545 New Clinton Road, Macon; Discount Tobacco, 508 Watson Blvd., Warner Robins; and Discount Tobacco, 516 Feagin Mill Road, Warner Robins. Four stores are in LaGrange. Another four are in Savannah, along with one in Sasser, near Albany.

During a Wednesday news conference, District Attorney David Cooke said to his knowledge, the suit is the largest civil Racketeer Influenced and Corrupt Organizations Act case filed by the state to stop an illegal racketeering enterprise, and it's the first since stores with the gambling machines have been connected to a central computer accounting system.

According to the lawsuit filed in Bibb County Superior Court:

Between July 1, 2013, and July 1, 2015, Forest Park-based Sudama Resorts LLC and the stores were required by law to self-report the amount of money played on the gambling machines and the net profits received each month.

Beginning July 1, 2015, the machines were directly connected to a central computer system that recorded customers' winnings electronically without input from the stores or the machine owners.

According to records from that system, from July 1, 2015, through Sept. 30, 2015, customers played more than $12 million, compared with a total of $15 million self-reported for all of calendar year 2014.

In the same period, the computer system records showed that customers won about $8 million, compared with $8 million self-reported for all of 2014.

Net profits for the three months were $4 million, compared with $3 million self-reported during 2014.

Based on the computer reports, Sudama Resorts and the stores submitted false tax returns to the state, failing to pay state sales or use taxes on about $32 million paid to customers as winnings.

Defendants named in the suit owe more than $20 million in taxes to state and local governments.

The majority of the stores are convenience marts, while others are store fronts established solely for illegal gambling, operating "in effect as mini-casinos," according to the suit.

As part of an investigation, law enforcement officers posing as customers gambled on the machines and received illegal cash payouts at more than a quarter of the locations where Sudama-owned machines are in operation, according to the suit.

Prosecutors allege that customers have played about $240 million on Sudama-owned machines in the past five years and been paid $168 million.

The suit also alleges that Sudama and the stores made false reports on regulatory applications in saying the entities weren't delinquent in tax payments.

Prosecutors are seeking the forfeiture of property, cars, cash and other items related to the alleged illegal gambling.

They also are seeking a court order to prevent defendants in the suit from disposing of or transferring any property or assets that might be forfeited, and for a receiver to be appointed to temporarily oversee the property and assets.

Attempts to reach a Sudama representative were unsuccessful Wednesday.

Cooke's office filed a similar suit in 2014 after 10 Bibb County stores were shuttered in the county's largest-ever commercial gambling raid.

Nine stores struck a $1 million settlement with prosecutors in May. The other store agreed separately to pay $175,000 in December 2014.

Cooke said Wednesday's suit was filed in Bibb County because Macon is a "hub for the activity" and based on prosecutors' prior success in civil racketeering lawsuits.

While Cooke said his office's primary focus is doing things to make families safer, he said residents have complained about the gambling activity in the community.

"At some point, enough is enough," he said. "When the GBI came and asked me to take this case, I knew that we needed to do that."

Information from Telegraph archives was used in this story. To contact writer Amy Leigh Womack, call 744-4398 or find her on Twitter@awomackmacon.

This story was originally published October 28, 2015 at 6:39 PM with the headline "Bibb County DA files suit alleging illegal gambling, RICO violations across midstate ."