Two men face federal conspiracy charges in a scheme that exploited a software glitch to inflate jackpot payouts on video poker machines in Las Vegas and beyond.
John Kane, 52, and Andre Nestor, 39, were charged Monday in federal court in Las Vegas with one count of conspiracy to commit wire fraud in connection with the scheme, which netted at least $429,000.
In early 2009, Kane, of Las Vegas, discovered a way to exploit a video poker machine through a rarely used feature that must be enabled by casino attendants, according to the criminal complaint. With the feature enabled, Kane played video poker at the minimum bet until he hit a jackpot. Then, using the feature, he changed his wager to the maximum bet and inflated the payout, according to the complaint filed by the FBI.
The complaint does not name any casinos or the brand of the machine in question.
After Kane's "test run" in Las Vegas, Nestor arrived from Pennsylvania, and together they used the scheme to take inflated jackpots in May and June 2009, the complaint said. Then Nestor took what he learned home to the Meadows Racetrack and Casino near Pittsburgh, authorities alleged.
During a visit to that casino in June 2009, Nestor posed as a high roller, arriving with a former police officer posing as his bodyguard, according to Washington County, Pa., court records.
Nestor found a Draw Poker machine made by Reno-based International Game Technology and persuaded a slot technician to activate the machine's Double Up feature. The technician obliged, but a supervisor overruled him because the change required gaming board approval, according to the records. But when the technician disabled the feature, he forgot to save the change, leaving the feature active for Nestor. Over the next two months, Nestor collected 61 video poker jackpots totaling $429,945, according to the court records.
Gaming authorities first suspected wrongdoing in late August 2009 when a Nestor associate tried to sign for a jackpot Nestor had just won. Within three days, investigators had uncovered the scheme. Nestor and two associates were indicted by a Washington County grand jury a month later.
Steven Toprani, Washington County's district attorney, said he was in touch with federal authorities while his case moved toward trial. As Nestor's trial was about to start Monday, federal agents showed up with an arrest warrant and took him away in handcuffs.
"It looks like this certainly was larger than a thief in Washington County," said Toprani, who said he was told the thefts could top $1 million.
Nestor is being brought to Las Vegas to face the federal charge. Kane was arrested in Las Vegas and appeared in court Tuesday.
Jerry Markling, chief of enforcement for the Nevada Gaming Control Board, said his agency began investigating Kane in the summer of 2009, but when the investigation grew to include other jurisdictions, the FBI took over.
Though not uncommon, the scam is not something investigators see all the time, Markling said.
It was unclear how Kane learned of the glitch. A player can stumble onto a glitch, but one also can be discovered by a dedicated slot cheat who buys a machine and experiments to find vulnerabilities, Markling said. "If you have a machine and you have long enough to experiment, you might be able to find a glitch like this," he said.
IGT, which makes about half of the slot machines used in the United States, did not respond to requests for comment.
David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, said the case shows how slot cheats have adapted to new technology over the years. "As the machines change, the cheating technology changes," he said. "Obviously this guy found a back door."
My take: This guy Nestor is as sharp as they come when it comes to cheating slot machines...but his internal security, which is of supreme importance in organized slot and casino cheating, was far below par. How could someone of Nestor's obvious intelligence let his cheat-partner sign for a jackpot that he himself had won? This of course would alert even the dummest of casino dummies that a scam was in the works. Perhaps Nestor was unaware that his cohort was trying to cash the jackpot, which could be the case if the partner was out to rip Nestor off. In any case, nearly all great casino scams (and this was one of them) come apart for some stupid reason that has nothing to do with the mechanics of the cheat scam themselves.
Nestor is now looking at a serious interstate conspiracy charge and probably five years in prison. This is up there with the Tran Organization Baccarat Scam (search this blog).