ANDREW Yeom, the executive director of the Commonwealth Casino Commission, on Tuesday asked the commissioners to suspend the exclusive casino license of Imperial Pacific International for its failure to comply with the commission’s orders.
The commissioners served as the appellate court in the evidentiary hearing for Commission Complaints 2020-003 to -005 which seek to compel IPI to maintain a three-month payroll; to fully pay its outstanding obligations to private entities as ordered by the court; and to pay last year’s $3.15 million annual regulatory fee.
Assistant Attorney General Mike Ernest represented Casino Commission Executive Director Andrew Yeom while attorney Tiberius Mocanu represented IPI.
Ernest submitted to the panel stipulations “as to certain facts which [are] not disputed by the parties.”
He said these included the following:
• Respondent IPI has violated Order 2020-003 “every day since Aug. 8, 2020, up through and including March 2, 2021.”
• Respondent IPI has violated Order 2020-004 “every day since Aug. 8, 2020, up through and including March 2, 2021.”
• Respondent IPI has violated CNMI law, Order 2019-004, Order 2020-004, and the stipulated agreement in Enforcement Action 2019-001 “every day since Oct. 1, 2020, up through and including March 2, 2021.”
Ernest said IPI has admitted all of the violations charged and all the claims in the three complaints. “We will prove that, and we will petition the commissioners for appropriate remedy,” he added.
Mocanu, for his part, said “IPI is going to do the exact same thing — it won’t dispute the charges.”
But “what we come here to do is to explain ourselves after the fact, and to ask commission to create a system that allows IPI to succeed.”
He asked the panel to create “a system of checks and balances and hold IPI accountable, but with an understanding of the economic crisis that [IPI faces and its impact on its] ability to make progress.”
Taking that into account, Mocanu said, should lead to “a framework that is feasible and that ends better.”
Ernest said since IPI does not dispute the charges, “the only thing left to decide is should they be penalized and what should the penalties be.”
If IPI offers no defense, he added, “the commission executive director moves for judgment on each claim of each complaint and [we’re] ready to argue for the appropriate penalty.”
Commission Chairman Edward C. Deleon Guerrero, who presided over the hearing, said “at this point in time since IPI does not object to those charges, we will go ahead and grant judgment in favor of the plaintiff.”
Ernest told the commissioners that the executive director seeks the suspension of the casino gaming license until IPI complies with the orders.
As for monetary sanctions, Ernest said IPI committed major violations. “Given the harm to the public due to the licensee’s failure to accept responsibility and considering the willful nature of [its] actions,” IPI should be fined up to $50,000 a day for each claim and each violation, Ernest added.
For Order 2020-003, with 53 violations and at $50,000 a day, IPI should be fined a maximum of $2.2 million, Ernest said.
Moreover, that amount is multiplied by the number of IPI personnel whose salaries were unpaid, for a total of $500.3 million, he said.
Regarding Order 2020-005, Ernest said there were a total of 859 violations so IPI should be fined $7.9 million.
For Order 2020-004, which Ernest said involves the most “astounding” number of violations, IPI would have been fined $2.6 million for 52 violations at $50,000 each. But because there were 300 instances of violations, the maximum fine must be multiplied by 300 for total of 15,900 violations.
Ernest said $50,000 multiplied by 15,900 violations is equal to a fine of $795 million.
Hence, IPI should be fined a grand total of $880.2 million, he added.
But he told the commissioners that the executive director does not request them to impose that fine on IPI.
Still, Ernest said the facts themselves serve as evidence that “IPI has actually zero respect for you,” referring to the commissioners.
“The casino investor should have simply said that they have no money, and that they are facing receivership,” Ernest said.
“Clearly they had better things to do than following our orders,” the commission’s legal counsel added.
Ernest reiterated that the $880 million fine “is not what we are asking for.”
But “we are asking the commission to impose a penalty to impress upon IPI that it needs to start following Commonwealth laws and start respecting the commission.”
“Until we hear from their attorney [Mocanu], the executive director leaves the determination of final penalty, if any, to the sound judgment of the commission,” Ernest added.
If IPI continues to “do nothing about it,” he said he will recommend to the executive director to seek the revocation of IPI’s gaming license.
“I think IPI has a great chance here to argue for mercy, and whatever the appropriate penalty is, once that is imposed, they have the chance to start making payments,” Ernest said. “They have an opportunity to make it right…. Today, it is up to the commission but ultimately, it is up to IPI.”
Attorney Tiberius Mocanu, representing Imperial Pacific International, speaks before the Commonwealth Casino Commission during the evidentiary hearing on Tuesday in the commission conference room in Gualo Rai.
Photo by Emmanuel T. Erediano
Assistant Attorney General Mike Ernest, right, presents the complaints against Imperial Pacific International to the Commonwealth Casino Commission during the evidentiary hearing on Tuesday.
Photo by Emmanuel T. Erediano
