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In a final bid to save itself, Atlantic City is suing the state of New Jersey for the $33.5 million that it was promised but failed to receive till date. The city made the demand in its defense to the suit filed by the state’s Department of Education which wanted to take control of the City’s finances until the city’s debt to the school system was settled.
The $33.5 million rescue package was to be given to Atlantic City as a part of a bailout mission under which the city’s eight casinos would make cash payments to the city instead of property taxes in exchange for agreeing to not appeal their earlier tax assessments. The rescue package was approved by the state Legislature twice but it stalled after Governor Chris Christie vetoed the proposal on two separate occasions.
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According to court filings made by Atlantic City, the city administration had depended on the $33.5 million and had included it in the city’s latest budget. City officials stated that if the money was given to them as promised by the state, the schools would have been paid with no problems.
In a statement, Mayor Donald Guardian said,
The real issue now is for Governor Christie and the Legislature to agree on a compromise to quickly end the fiscal crisis in Atlantic City.
I have spoken with many legislators who want to find a compromise, and they are willing to find a way to save Atlantic City. I am confident that once we get past the politics, we will find a winning solution that everyone can agree upon.
Christie has so far released no comment on the issue. The political jousting came even as the city paid the schools another $4.2 million in order to keep to its committed calendar of payments. The city continues to owe the schools payments to the extent of $25.5 million which is to be made by July 15.
As a part of its lawsuit, the state had demanded Judge Julio Mendez to order the city to keep aside the initial $25.5 million it is expected to receive in tax revenues during early May. The tax revenues are expected to be around $40 million to $50 million and the state wanted to ensure that the money was used by Atlantic City to clear its debt towards the school district.
The judge refused the request saying that since the city administration was up-to-date on its payments to the schools, there was no reason to impose additional demands.
Financial regulators in the Philippines have been investigating a money laundering scam that covers a grand total of $100 million brought into the country by illegal means. The money was brought into the country’s banking system, transferred to a black market forex broker, shuttled between three local casinos and then finally moved overseas.
It is believed that the illicit amount is the result of funds stolen by computer hackers from the account of an overseas bank that is reportedly situated in Bangladesh. According to governmentofficials in the Philippines, the Bangladeshi bank had reported earlier that funds were missing and it looks like those funds could have been washed in the Philippines.
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The Anti-Money Laundering Council (AMLC) issued a statement that the ongoing investigation has revealed that the laundering activity could be of greater proportions. Top ranking officials at the AMLC also claimed that the modus operandi of the group as well as the involvement of other parties will be revealed in the course of the investigation.
The scam is reported to have infiltrated the Philippine financial system beginning with a transaction between foreign exchange broker Philrem and a representative of the Makati City branch of Rizal Commercial banking Corp. Subsequently, the currency was traced to the account of a Chinese-Filipino who is also a junket operator.
This junket operator is known to have contact with local casinos and a wide network of gamblers. Following this, a suspicious transaction report was filed by the bank with AMLC which promoted the authorities to launch an investigation. The foreign counterpart of the Bangko Sentral ng Pilipinas is also reported to have sent a warning note regarding the suspicious transaction.
Banking and gaming industry sources claim that the funds belong to a Macau-based client and went through the money laundering process at three casinos in the Philippines where the money was used to pay for losses incurred by the casino and also to buy casino chips. The three casinos that were used for money laundering are the Solaire Resort and Casino, City of Dreams Manila and the Midas Hotel and Casino.
The financial institutions involved include the Philippine National Bank, where the Chinese-Filipino junket operator is a client, and Banco De Oro Universal Bank (BDO). Officials add that BDO may not continue to feature in the investigation as its role was limited to transmitting 1.5 million dollars to a foreign exchange broker Philrem, which is considered a routine affair.
Investigators are now attempting to trace how an amount of such proportions were accepted by the banks in question without verifying the customer’s source of income.