October 11, 2012 in City

Ex-casino owner facing financial troubles

Saucier allegedly misled creditors of assets
Steve Green VEGAS INC
 

Robert Saucier, the elusive businessman whose Mars Hotel and Casino in downtown Spokane mysteriously burned to the ground in 1999, is in financial trouble in Las Vegas.

For at least the third time, Saucier or his casino supply company, Galaxy Gaming Inc., are accused by bankers and other creditors of hiding assets to avoid paying debts.

Bank of America filed a lawsuit last week in Las Vegas against Galaxy Gaming and a trust named for Saucier’s teenage daughter, asserting fraudulent transfer claims.

Saucier developed the Mars in Spokane, which filed for bankruptcy in 1997, later closed and then burned down while it was uninsured.

At some point, Saucier left Spokane, causing some officials to suggest he had skipped town.

The newest suit was filed as Bank of America tries to collect on what it alleges is a defaulted loan with a balance of $1.18 million.

Requests for comment on the lawsuit were placed by email and phone with Galaxy Gaming, a publicly traded penny stock company. Galaxy Gaming sells casino table games and associated systems and reported revenue of $1.8 million in the second quarter.

The Bank of America lawsuit says the loan in question was issued in 2007 to an entity called Galaxy Gaming LLC and that it was guaranteed by the “Alix Saucier Regulatory Trust.”

Records show Alixandra Saucier, Robert Saucier’s daughter, was about 13 years old when the loan was made, though an attorney for the trust executed the agreement to guarantee the Bank of America loan. The trust was established by Alixandra Saucier’s grandmother.

The bank’s lawsuit says the 2007 loan application made “false and misleading statements” about the ownership of Galaxy Gaming LLC.

The suit says the bank was told the Alix Saucier trust owned 95 percent of Galaxy Gaming LLC, but a tax return later showed Robert Saucier held 100 percent of the company’s voting stock in 2004, and tax returns for 2005 and 2008 showed that he held 50 percent of the stock.

The suit also said that in 2007, most, if not all, of Galaxy Gaming LLC’s assets were transferred to Galaxy Gaming Inc., “which resulted in the insolvency of Galaxy Gaming LLC.”

Records show Robert Saucier was the manager of Galaxy Gaming LLC and the president of Galaxy Gaming Inc. at the time of this transfer.

Bank of America charges in the lawsuit that Galaxy Gaming LLC defaulted on the loan by failing to make required payments on time, by transferring property backing the loan to Galaxy Gaming Inc. without the bank’s consent and by providing the allegedly false and misleading information to the bank.

The new suit follows years of litigation since the early 2000s pitting Robert Saucier and Galaxy Gaming against creditors of the Mars Hotel. In lawsuits that played out in Spokane, Seattle and Las Vegas, creditor Sherron Associates Inc., of Bellevue, charged that Saucier had failed to pay an $825,000 judgment for a defaulted loan to the Mars and had “engaged in a systematic and sophisticated scheme to protect his assets.”

The judgment by 2008 had grown into a $1.6 million claim with interest and costs.

“Saucier went to great lengths to avoid paying the judgment and created dozens of sham companies operating under the moniker ‘Galaxy Gaming,’ ” Sherron attorneys charged in a court filing.

The creditor charged that to protect revenue from games he leased to casinos, Saucier formed at least 24 companies and that these companies were liable for the Mars debt since they and Saucier were one and the same.

Saucier and Galaxy Gaming consistently denied wrongdoing in the litigation with Sherron Associates.

They also argued that Sherron Associates, as an assignee of the Spokane debt, lacked standing to sue them and at one point Saucier sued Sherron, alleging abuse of process.

Nevertheless, “in order to reduce the costs and uncertainties associated with litigation,” the cases were settled last year with Galaxy Gaming Inc. agreeing to pay Sherron $150,000 and Saucier agreeing to pay $350,000.

Reprinted with permission from VEGAS INC, a sister publication of the Las Vegas Sun.

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