This summer, police in southeastern Minnesota noticed a string of break-ins of pop machines. Plotted on a map, the path stretched from the Faribault area to Red Wing and, authorities suspect, to the doors of Treasure Island Casino.
Quarters.
While a person walking into a bank with buckets full of quarters might raise suspicions, there is no such danger in a casino, where converting hundreds and even thousands of quarters into paper currency is routine.
«We’ve noticed thefts, pop machine thefts. We many times have traced the money right back to the casino,» said Dean Albers, chief deputy in the Goodhue County Sheriff’s Department. «We catch the [young adults], and they admit they took the money right down to the casino.»
Laundering quarters at casinos is just one of the many new crimes that law enforcement authorities have spotted as legalized gambling has expanded across Minnesota over the past five years.
Criminal activity linked to gambling remains a small part of the state’s total crime problem, and it rarely involves violence. But gambling-related crimes are on the rise, according to law enforcement officials, and that is putting a burden on the criminal justice system, pinching taxpayers and causing losses of hundreds of thousands of dollars annually for employers.
The growth in gambling-related crime is especially troublesome for counties where casinos are located.
The 14 counties in Minnesota that have casinos in them are experiencing a significantly faster growth in the crime rate than are counties without casinos, according to a Star Tribune analysis of crime statistics.
Between 1988 – when the first of the state’s 17 casinos began operating – and 1994, counties with casinos saw the crime rate rise twice as fast as those without casinos. The median change in counties with casinos was a 39 percent increase, compared with an 18 percent increase in non-casino counties.
The analysis also shows that the differences are greatest for economic and property crimes such as fraud, theft and forgery/counterfeiting – crimes that are likely to be linked to gambling. Consider:
The median change in the forgery/counterfeiting rate in counties with casinos was more than double the increase in counties without casinos – 55 percent vs. 25 percent.
For fraud, the median change in counties without casinos was a 16 percent increase. The median change in counties with casinos was more than twice as high – a 40 percent increase.
For larceny, the difference was even greater. The median change in counties without casinos was an increase of 2 percent. The median change for counties with casinos was a 34 percent increase.
(The median is the midpoint in a ranking of numbers from high to low, or vice versa. Half the numbers – in this case, the percent change in the crime rate of counties – are greater than the median, and half are lower than the median.)
Cash, crime and casinos
The statistics alone do not prove that the casinos are responsible for the faster-growing crime rates in those counties, but the numbers are bolstered by interviews with law enforcement officials who say that the expansion of gambling is adding to the bottom line of crime in Minnesota.
For example, when Treasure Island Casino became popular, Red Wing police saw their call volume jump by 100 a month, on average, for three consecutive years, said Police Chief Ed Krause.
«We don’t really break down casino calls,» he said. «Obviously, we are busier because they’re there. . . . There’s been an increased demand for service.»
Krause and other police officials say they would see an increase in crime connected to any development that attracts thousands of visitors each day, just as the Mall of America has brought more crime to Bloomington. But police also say that some crime is unique to casinos, because so much cash trades hands. And unlike other private developments, the casinos are exempt from taxes and generally do not cover the costs associated with increased criminal activity, law enforcement officials say.
Mille Lacs County is a good example of how casinos are burdening local police agencies.
When Grand Casino Mille Lacs opened in April 1991, what followed was a huge jump in the number of calls reporting crimes or seeking help.
In 1990, the last full year before the casino opened, the Sheriff’s Department responded to 540 calls from the northern sector of the county. By last year, the number of calls from that sector, which includes the casino, had risen to 1,876. And while that sector accounted for only 7 percent of the county’s total calls in 1990, it accounted for 17 percent of all calls in 1994. In short, the casino and the traffic it draws to the county are consuming a growing share of the Sheriff’s Department resources.
The calls involve everything from thefts of wallets at the casino to gamblers accidentally locking their keys in their car.
The Mille Lacs Band of Chippewa, which owns the casino, also answers calls for help with its own part-time law enforcement agency. But despite the tribe’s efforts to help, the casino is «very much . . . a drain» on the Sheriff’s Department, said Sheriff Jules Zimmer.
«It not only generates more work for our deputies, but for the dispatch center as well,» he said. «There are more calls coming in, more paperwork. . . . It puts more of a burden on our jail.»
Since the casino opened, the department has added two deputies and another dispatcher/jailer. Even with the federal government paying most of the cost of one deputy, the extra cost to county taxpayers this year will be nearly $70,000.
Thefts and bad checks
Redwood Falls, Minn., doesn’t have a casino in it, but Jackpot Junction is just 5 miles down the road in Morton. Since Jackpot Junction expanded from a bingo hall into a full-fledged casino, starting in late 1988, Police Chief Mike Ose has seen the impact in his town. There are more strangers, more reports of thefts, more bad checks, a couple of gambling-related embezzlements and a robbery committed by a desperate gambler who blew his paycheck at the casino.
Not all of the growth in crimes can be linked to the casino, but some of it clearly is, Ose said. The most frightening example was the shooting of one of the city’s eight police officers in July 1992. Derek Woodford was shot by a gambler from Chicago who had broken into a local bank after a day of gambling at Jackpot.
Woodford spent 13 days in the hospital recovering from three bullet wounds.
Immediately after that shooting, Redwood Falls added an officer. The cost to the city’s 4,859 citizens: $35,000 a year.
Some casinos have made good-faith financial gestures to local governments. Firefly Creek Casino, for example, contributed to the cost of a weather radar system for Yellow Medicine County. Treasure Island donated a used patrol car to Red Wing police.
In Prior Lake, the Shakopee Mdewakanton Dakota Community reimburses the Police Department for every police and fire call from Mystic Lake and Little Six casinos and the noncasino parts of the reservation. Last year, the tribe paid more than $266,000 to the city for 1,084 police and fire runs, the bulk of them to the casinos.
Taking cash from the till
It is the financial crimes, more so than the violent ones, that attend the explosion of gambling in Minnesota.
Judging by several high-profile embezzlement cases, employers are losing hundreds of thousands of dollars a year to gambling-related thefts by employees.
Some examples:
Susan Robinson: She was working as a clerk in the Hennepin County sheriff’s office and attending law school in 1992, when her gambling addiction spun out of control. Robinson, 40 years old at the time, went from aspiring lawyer to the «Bordertown Bandit» when she robbed a half-dozen banks just across the border in Wisconsin. She stole the money to finance her losing trips to Mystic Lake. She is serving an 11-year sentence in federal prison.
Chee Chang: An assistant manager of a TCF Bank in Bloomington, Chang packed $126,000 into a cardboard box and disappeared. Two weeks after the theft on June 1, Chang, 21, surrendered to the FBI, and has since returned more than $113,000. Chang, five months pregnant at the time of the theft, had gambled heavily at Mystic Lake, according to a law enforcement official. She pleaded guilty and was sentenced to four months in prison and three months of home detention.
John B. Larson: An employee at a rental center in Little Falls, Minn., in 1993, Larson at first admitted stealing more than $240,000 in cash receipts over a two-year period to feed his addiction to pulltabs and alcohol. He later told a judge the theft was much lower, but still more than $100,000. He pleaded guilty, was sentenced to six months in jail and ordered to pay $145,000 in restitution.
Theresa Erdmann: Before legalized gambling spread to Minnesota, Erdmann’s fondness for slot machines and video poker was kept in check by the lack of gambling opportunities. She occasionally traveled to South Dakota casinos and to Las Vegas, but her gambling never consumed her.
But when the State Lottery was created and when casinos opened within driving distance of Erdmann’s home near Madison, Minn., gambling became easy and frequent. In June 1993, she pleaded guilty to stealing nearly $123,000 from the checking account and weekly offerings at St. Michael’s Catholic Church. The money was blown on gambling.
Erdmann is serving a three-year sentence in the state prison in Shakopee.
«Whatever you think about the morality of gambling, the simple, hard fact is it is a cash industry that inevitably spins off human victims,» said David Lillehaug, the U.S. attorney for Minnesota.
Although no statistics are kept on crimes linked to compulsive gambling, Lillehaug and other law enforcement authorities say they are seeing an uptick in such cases, especially involving gambling-related embezzlement. That was a problem that officials say they rarely encountered before 1990.
«Prior to 1990, we had zero cases» of gambling-related embezzlements, said Bill Urban, president of Loss Prevention Specialists, a Coon Rapids company that helps employers prevent and investigate internal thefts.
But since then, Urban has helped investigate gambling-related losses of «well over $500,000» and finds that his expertise at interviewing suspect employees is in high demand.
Nick O’Hara, superintendent of the Minnesota Bureau of Criminal Apprehension, said he believes that the true extent of gambling’s impact on crime is yet to be felt.
«We’re seeing the tip of the iceberg with respect to gambling-related criminal activity,» O’Hara said. «It takes time for some of these crimes to surface. It takes time for people to find out somebody they had confidence in betrayed that confidence.»
The insurance industry, which provides financial protection for companies victimized by embezzlement, also has noticed a general increase in such cases, said Mike Piccolino, a senior underwriting officer in the financial services division of the St. Paul Companies.
Gambling has long been recognized as a root cause of embezzlement, a crime that typically involves small amounts of money initially, and then grows over months or years as the habit worsens.
Piccolinosaid he believes that the growth in embezzlements is at least partly explained by the increased availability of gambling.
«It certainly is increasing the temptation,» he said.
In most of these gambling-related embezzlement cases, authorities say, the court file shows the same thing: No prior criminal record.
The high crime rate among problem gamblers has been well established. A study of Minnesota’s six state-funded treatment centers for gamblers has found that one in five of the gamblers seeking treatment has been arrested.
The number who commit crimes is much higher. The National Council on Compulsive Gambling has found that 65 percent of gamblers treated in in-patient centers had committed a crime.
The state is conducting research to learn more about gambling’s contribution to crime and to assure that criminals with gambling problems get help. Probation officers are required to identify people for whom gambling might have been a factor when they committed crimes. Those people then would be screened to determine the severity of their gambling problems.
But the research results have been delayed for nearly a year, and the project clearly won’t get to all problem gamblers who commit crimes. For instance, only those who commit felonies such as forgery, embezzlement and theft of public funds will be included in the study, though it is clear that gamblers commit many other kinds of crimes. And many counties haven’t fully participated in the project.
More violent crimes
Although violent crimes connected to gambling appear to be rare, the list of such incidents is growing. A strain of tragedy runs through some of these stories of compulsive gamblers who become so desperate that they rob to feed their addiction.
Take Jean Mott, a 38-year-old mother of three who worked a night shift at a K mart distribution center to pay the family bills. But the bills began backing up when Mott headed to Mystic Lake, rather than her Shakopee home, at the end of her shift.
Just before dawn one day in January, having lost another paycheck to the slots at Mystic Lake, Mott drove home, collected a ski mask and duct tape, and drove to the Brooks’ Foods convenience store in Shakopee.
With her hand in her pocket to simulate a gun, Mott tied up the store clerk and stole $233. Police easily traced the robbery to Mott because a patrol officer, unaware that the robbery was underway, had recorded her license plate when he saw her car parked about a block from the convenience store that morning.
In Redwood Falls in January 1991, a 22-year-old man who blew a $160 paycheck at Jackpot Junction put on a ski mask and drew a knife on a convenience store clerk. But seeing the terror on the clerk’s face, the man peeled off his mask, apologized, gave the money back and volunteered to come back later to talk about the incident.
Sometimes gamblers are the victims of violent crimes. In February, three men picked their target – a woman in her 60s – at Firefly Creek Casino near Granite Falls. They followed her home, and as she was getting out of her car, they punched her, stole her purse and $211. The casino’s cameras helped identify the suspects, and when they returned to the casino five days later, the casino called the Yellow Medicine County Sheriff’s Department. Deputies arrested the men as they left the casino.
Police near casinos say they also are noticing an increase in bogus reports of thefts from people who lie to a spouse and police about the disappearance of a ring, video camera or other expensive item that they actually pawned to pay their gambling expenses.
Some people claim that their checkbook was stolen and someone forged their signature on a check cashed at a casino. But casino security cameras clearly show the person who made the report had signed the check at the cashier window.
«We have a lot of falsely reported thefts,» said Chief Ose, of the Redwood Falls Police Department.
Ose said that when suspicious thefts are reported, his officers inform the victims that they if they want to file a report it will be investigated thoroughly because of the increase in false reports.
«Often the person will say, `Let me check at home first, and I’ll get back to you,’ » Ose said. «And usually we don’t hear from them again.»
