The president and CEO of Mohegan Tribal Gaming Authority stepped down amidst an investigation into financial irregularities this week. Bobby Soper, who was the president of Mohegan Sun Pocono before his ascension to the CEO title for Mohegan Tribal Gaming, resigned after an audit of the Mohegan Sun Pocono.
Mohegan Sun Pocono, located in Wilkes-Barre, Pennsylvania, might face disciplinary action, accordin to an SEC filing. Mohegan Sun Tribal Authority said Bobby Soper had resigned “to pursue other opportunities, effective immediately.”
Mitchell Etess as Acting CEO
Former tribal authority CEO Mitchell Etess is replacing Mr. Soper on a interim basis. Etess will conduct a search for a new permanent CEO and president for Mohegan Sun’s tribal authority.
The authority asked the U.S. Securities and Exchange Commission to withhold its report until Mitchell Etess had a chance to review it. Presumably, the acting CEO wanted to review the report in order to provide a public statement on the matter.
Pennsylvania Gaming Control Board Report
Meanwhile, an SEC filing said that the Pennsylvania Gaming Control Board’s Office of Enforcement Counsel said it was releasing a report this week about “possible operational control deficiencies” at Mohegan Sun Pocono.
The SEC filing said that the host city for the casino also would be subject to disciplinary action, without specifying which officials or institutions might have been involved in wrongdoing. The filing said Plains Township was “subject to disciplinary action including a fine and undertakings to remediate the issues identified.”
Plains Township Faces a Fine
The report suggested that operational control deficiencies were at fault, so the Plains Township’s wrongdoing might have nothing more to do with negligence in spotting the problem. The SEC said the “system of tracking and reporting the issuance of certain customer incentives such as free slot play”.
The flawed system allowed three people to scam $422,000 from the Mohegan Sun Pocono. Two have been charged and sentenced for their crimes: Robert Pellegrini and Mark Heltze.
Pellegrini-Heltze Loyalty Card Scam
Robert Pellegrini was once the former VP of Player Development at the Mohegan Sun Pocono casino. He was the inside man who helped Mark Heltze scam the money from the casino. From May 2014 to April 2015, their scheme worked, until someone in the casino staff gave an anonymous tip to the higher-ups.
Both men pleaded guilty to conspiracy to commit money laundering and await sentencing. Each could face up to 20 years in prison and a $500,000 fine. Both agreed to make a full restitution to the casino.
Rochelle Poszeluznyj Pleaded Guilty in September
A third person involved in the scheme, named Rochelle Poszeluznyj, pleaded guilty in September 2016 to the same charges. Rochelle Poszeluznyj was a beverage server at the casino. She’ll have to pay a $2000 fine and also faces up to 20 years in jail.
The complicated scheme required the three to duplicate the information on players loyalty cards, then cash out the comps. That led to the hundreds of thousands of dollars in profits, but it required Robert Pellegrini as the lynchpin to the scheme. As an executive in charge of player relations, he had access to the electronic card systems and clearances needed to collect the comps.
ReferLocal Termination and Lawsuit
Mohegan Sun Pocono terminated contracts with Wilkes-Barre marketing and advertising company ReferLocal on February 14, after year-end financial reports showed a $51 million loss.
Bobby Soper had a 5% equity interest in ReferLocal, but had never disclosed the relationship. ReferLocal’s contract was signed at a time when Soper was the CEO of Mohegan Sun Pocono. ReferLocal has since filed a lawsuit, seeking damages for the termination of the contract.
It should be noted that Bobby Soper was not implicated in the crimes of the loyalty card scheme, but he installed the system which was exploited. The main reason he chose to resign after the report came out was the fact he did not disclose his financial interest in ReferLocal, it would seem.
Bobby Soper Profile
Bobby Soper was the CEO of Mohegan Sun Pocono until 2012. At the time, he left to become the CEO of the main property in Connecticut, the world famous Mohegan Sun. In March 2015, he became the CEO of the Mohegan Tribal Gaming Authority.
At the time he left the Pennsylvania property, Mike Bean replaced Soper at Mohegan Sun Pocono. Mr. Bean left that role in May 2016 and was replaced by Tony Carlucci.