Naked City

Police raid convenience stores, gaming rooms in gambling bust

This business on Peyton Gin Road is one of 40 that police allege were hosting illegal gambling machines.
This business on Peyton Gin Road is one of 40 that police allege were hosting illegal gambling machines. (Photo By John Anderson)

On July 27, the Austin Police Department in conjunction with agents for the IRS and FBI executed 40 federal warrants, seizing 706 eight-liner gaming machines from area convenience stores and gaming rooms as part of an 18-month investigation code-named Operation Casino Flush.

According to APD Cmdr. Harold Piatt, the investigation was prompted by calls from citizens who complained that their relatives, lured by the promise that they could "win big," were gambling away their earnings on the slot-machinelike games. Promising cash, food, gas, lottery tickets, or any other prize over $5 is illegal in Texas; moreover, Piatt said, it appears that the machines were rigged in order to avoid any regular payoffs. So far, it appears that a core group of people organized under a single business entity is responsible for the alleged scam – which may have been in operation for three or four years – but police have not yet released specific information about the masterminds behind the machines. (On July 28, police released the names of five individuals who were arrested in connection with the sting and who were each charged with various forms of theft, but the department declined to elaborate on exactly how the individuals were connected to the gambling operation.) "The reality is, the real investigation is just beginning," Piatt said.

Police have also seized records connected to a handful of bank accounts, and investigators are now immersed in a paper-based investigation. The investigation is being shepherded by IRS agents looking into possible tax fraud, and FBI agents, who have dominion over money-laundering operations. The efforts are aimed at determining how much money the gambling operation has taken in, and how the money has been returned to circulation.

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KEYWORDS FOR THIS STORY

gamblingcrime, Austin Police Department, IRS, FBI, Harold Piatt, Operation Casino Flush, gambling

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