Thursday, October 08, 2009

False Jackpot Attacks Plague Pittsburgh Casino to Tune of $500,000!

False jackpots paid at Meadows went unnoticed for weeks.

State gaming officials said the theft of money from a high-stakes slots machine at The Meadows Racetrack and Casino went unnoticed for several weeks because the false jackpots that the machine was paying out to a trio of suspects were not recorded internally by the machine.

State Gaming Control Board spokesman Doug Harbach said that detecting the theft of more than $430,000 would have been easier if the winnings displayed on the machine matched its internal records. The internal records automatically transfer data about the machine to the casino and the state Department of Revenue, which monitors the electronic records.

Department of Revenue spokeswoman Stephanie Weyant said she could not discuss individual machine revenue or data because the information is protected and confidential. Law enforcement officials believe the three suspects were able to steal more than $430,000 over a period from late June until the end of August. The theft was not discovered until a state gaming control board agent became suspicious in late August when one of the suspects attempted to cash in a jackpot.

Although casino and state gaming officials praised the work of investigators in uncovering the theft, a Las Vegas casino security expert yesterday, suggested the casino "failed to respond" quickly enough to the two-month long crime spree and is partly to blame for not doing a better job of monitoring its slots machines.

Andre Michael Nestor, 38, his roommate Kerry Laverde, 49, of Swissvale, and Patrick Loushil, 42, of Brookline, were charged Tuesday with 367 felony counts of theft, receiving stolen property, criminal conspiracy, computer trespassing and other charges. Although the men are from the Pittsburgh area, Mr. Nestor and Mr. Laverde lived in Las Vegas from 2001 to 2007 before returning here. The three are accused of exploiting a software glitch in a draw-poker slot machine at the North Strabane casino, and rigging the machine to display false jackpots. Washington County District Attorney Steven Toprani said the men collected the fraudulent winnings during 15 visits to the casino from June 22 to Aug. 31.

State Gaming Control Board officials said nobody noticed the scam at first because the machine did not register the jackpots. The glitch affected only the display screen of the machine. The jackpot that displayed on the screen did not match internal records of the machine, they said. Officials said that they weren't sure how the men knew about the glitch, which was triggered when the "double-up" feature of the game was enabled. They said Mr. Nestor gained the trust of employees by giving them sizable tips and recounting his successful exploits as a "professional gambler," in Las Vegas.

Police said Mr. Laverde -- known as "Joe Blow" by friends -- posed as a bodyguard for Mr. Nestor, flashing his badge to employees and hinting that he carried a concealed gun. Mr. Loushil, they said, assisted in diverting employees' attention and sometimes cashed in winnings for Mr. Nestor. A technician activated the double-up feature at Mr. Nestor's request, but came back to the machine later after his supervisors told him that the double-up feature couldn't be used without the permission of the Gaming Control Board.

The technician disabled the feature, but inadvertently neglected to save his programming changes, leaving the option available. Other employees didn't notice the oversight, and for the next two months the trio exploited the glitch through a complicated set of keystrokes that would cause the machine to display jackpot winnings that didn't exist.

Eventually, on Aug. 28, state Gaming Control Board Agent Josh Hofrichter became suspicious when he noticed that Mr. Loushil was trying to cash in a jackpot won by Mr. Nestor. Three days later, when Mr. Nestor came back into the casino, he headed for the same machine and tried to claim a $2,350 fraudulent jackpot. But this time, when Mr. Nestor attempted to collect the winnings, he was secretly being watched by state troopers. He was told by casino staff that he could not collect his winnings until staff could verify that the internal controls of the machine were working properly.

Police said Mr. Nestor told them he had to make a phone call and left the casino in haste. What followed was a five-week grand jury investigation, which culminated in the arrests this week.Ken Braunstein, a security consultant licensed by Nevada who specializes in casinos and gaming, and who has taught criminal justice for 29 years at the University of Nevada, said glitches like the one exposed in the Meadows slot machine are "not at all uncommon," and are usually caught by experienced security personnel.

Because slot machines have electronic controls, they are vulnerable to occasional hiccups, much like a computer program or the electronics systems in automobiles, he said. However, Mr. Braunstein was critical of the Meadows management, saying the excessive payoffs should have raised a red flag and triggered an investigation much sooner. "Management failed to respond to the information that was given to them by the machine," he said. "It was their fault."

Meadows spokesman David LaTorre said the casino disputes the claim that they did not act quickly enough, saying that it was an isolated incident and that the problem has been remedied. "We disagree with that assessment," Mr. LaTorre said. "We're confident it's not going to happen again, period. We have taken several internal security steps to prevent that."

The machine's manufacturer, Reno, Nev.-based International Game Technology, is one of the world's leading providers of slot machines and gaming software. Director of Marketing Julie Brown said the company has pulled similar slot machines from casino floors so the glitch can be fixed. She couldn't estimate how many machines were affected or where they were located, but said the company provides products all over the world.

Mr. Laverde was a former Swissvale Borough police officer, and claimed on an Internet site three years ago that he also was a security investigator for a Las Vegas bank. The Nevada Gaming Board said none of the three men worked for any casinos in that state. Swissvale police Chief Greg Geppert said yesterday that Mr. Laverde left the police force in 2001 and that he was ordered yesterday to stop wearing his badge. "It's really embarrassing to have somebody like him ... He hasn't even been here for eight years and he's still giving us a black eye. I have a lot of really good guys here, a lot of professional guys, and this is embarrassing," Chief Geppert said.

Stephanie Waite of West Penn Allegheny, the parent company of Forbes Regional Hospital in Monroeville, said Mr. Laverde has been a security officer there for a year and said it was the company's practice to suspend employees without pay after they are charged with a crime.