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Officials look for evidence of embezzlement and tax evasion; Stardancer Casinos' owners deny any wrongdoing.
By AMY WIMMER, Times Staff Writer
© St. Petersburg Times
published January 17, 2003
TAMPA -- When federal agents raided more than a half-dozen locations connected to Stardancer Casinos on Tuesday, they were seeking evidence that the company's owners committed crimes ranging from mail and wire fraud to tax evasion.
Search warrant affidavits unsealed Thursday show that the FBI and IRS are trying to establish what became of $40-million an Ohio man is accused of embezzling from a bank to finance Stardancer. The gambling boat operation is run by Sam Gray Sr. and his wife Marilyn.
Reached at his Gulfport home late Thursday, Sam Gray Sr. said he and his wife never knew the money was allegedly stolen from the customers of a small, two-branch bank in Paulding County, Ohio.
Their business partner and financier was Mark Steven Miller, a former vice president of Oakwood Deposit Co. who has been charged with bank embezzlement and money laundering. Authorities say Miller embezzled $48-million over nine years and sent $40-million of it to Stardancer.
"We and Stardancer were perfectly innocent of any of Steve Miller's activities," Sam Gray Sr. said Thursday night.
According to the court documents released Thursday:
-- While Stardancer employees were paid late in December and are still owed three weeks' pay, Gray paid himself about $400,000 a year. His wife earned $150,000 annually, and each of his children received $52,000 a year. The family also received car lease payments and household allowances. Gray said during an April interview with federal investigators that he owed $1.4-million in payroll taxes. He said Thursday that he and his wife have not paid themselves since October.
-- The couple purchased a $1-million home at Pasadena Yacht & Country Club in June, four months after the federal government began investigating Stardancer's connection to Miller. Federal investigators think Marilyn Gray may have lied on a loan application for the home.
The Grays also are accused of trying to write off $25,000 in furniture for the home as a business expense.
-- Stardancer's federal income tax returns for 1999 through 2001 reflected net operating losses for each year, even though the company was then benefiting from the $40-million from Miller, the court records state.
"The outstanding liability grows and Gray has made it a priority to line his pockets first and foremost by paying himself and his family a hefty salary," federal agents wrote in an affidavit.
Gray defended his family Thursday.
"My wife and I never took any cash from the boats. We've only put money in," he said. "We've subsidized the company personally with monies that we will never get back. I think what we've done is exemplary."