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Seven people, three GSC officers and four other individuals from Guam Shrine Club, a nonprofit organisation, have been accused of gambling illegally, laundering money, and conspiring to “unjustly enrich themselves.”
The nonprofit organisation that carries out Hafa Adai Bingo for charity has drawn criticism for gambling and money laundering activities. In the district court of Guam, several GSC officers and four other individuals have been accused of illegal gambling, conspiracy and money laundering.
To raise funds for transportation to the Shriners Hospital for Children in Hawaii, Jose Arthur Chan (GSC President), Alfredo Leon Guerrero (former president), and Richard Brown, vice president and secretary, conducted bingo games. A conspiracy has been alleged between them, along with Michael Marasigan, CEO of Ideal Ventures, Christine Chan, Jose Arthur Chan’s wife and founder of Nanan Bray, Juanita Capulong, wife of Leon Guerrero, and Minda San Nicolas, founder of TSAC Ventures and sister to Capulong, to “unjustly enrich themselves.”
Gambling is illegal in Guam, except for bingo games conducted for charitable purposes by certain organisations. Form 990 must be filed by the organisation every year to maintain its status as a nonprofit, as stated by the Guam Department of Revenue and Taxation, however, that did not happen.
According to the allegations, between March 2015 and December 2021, seven individuals participated in an illegal gambling business disguised as a charity – particularly bingo games sponsored by the Guam Shrine Club. A District Court indictment stated, “It was the object of the conspiracy for the defendants to unjustly enrich themselves and others by operating an illegal gambling business under the guise of charitable and civic fundraising.”
A GSC officer allegedly misrepresented the organisation’s revenue on income tax forms as part of the conspiracy. The indictment stated, “It was further part of the conspiracy that defendants Alfredo Leon Guerrero, Art Chan and Richard Brown authorised signatories on various GSC bank and credit union accounts, which they used to pay profit distribution checks to co-conspirators and pay expenses incurred by co-conspirators from funds derived from illegal gambling.”
The bingo proceeds were deposited into the accounts of various GSC banks and credit unions for $34,000,000. According to the court document, “On or about March 12th, 2015, during a GSC executive council meeting, defendants … falsely represented that Marasigan would act as a consultant when the GSC hosted bingo fundraisers, when in fact, Leon Guerrero, Art Chan, Brown and Marasigan well knew that Marasigan and others would conduct, finance, manage, supervise, or direct the GSC’s bingo fundraising activities.”
Three months after GSC fundraising/bingo payments began, Guerrero, Chan, and Brown opened an account with BankPacific. That same day, Affinity Solutions and Vantiv signed a merchant processing agreement for Vantiv and Worldpay LLC. Although the GSC officers were involved in financial activities, court documents stated that they had “falsely reported total revenues” on their tax returns. In 2019, Chan signed the last form, which reported $153,880. According to court records, neither a form nor an application was filed in 2020 or 2021.
According to the court, “On or about June 14th, 2021, defendant Art Chan signed and caused GSC’s amended 2019 Form 990 to be filed that reflected total revenues over $1 million.” This copy did not correspond to the merchant copy used in GSC’s bingo and fundraising transactions.
In 2019, there were $5,820,546.79 in transactions reported on Form 1099-K, which reports gross sales from cards and third-party networks. According to the report for 2020, the number of transactions was $2,158,952.48; for 2021, the amount was $7,050,182.99. “Between January 2018 to on or about October 22nd, 2021, defendant Marasigan wrote and issued checks, drawn from his and Ideal Ventures LLC’s bank accounts, made payable to Christine Chan, Nanan Bray, Juanita Capulong, Minda San Nicolas and TSAC Ventures as part of their return on investment,” court documents state.
The amount received by Capulong exceeded $600,000, the amount received by San Nicolas exceeded $700,000, and the amount received by Christine Chan exceeded $1 million. Each of the seven individuals was charged in District Court with conspiring to operate an illegal gambling business, conspiring to launder money. On June 14, Marasigan appeared before Magistrate Judge Michael Bordallo and pleaded not guilty. Under federal court records, Chan, Nicolas, and Brown pleaded not guilty the following day, and Guerrero pleaded not guilty on June 21st.