Guy Pleads Accountable To Washing $21M Within Lyford, TEXAS, Illegal Video gaming Operation

Rene Gamez Jr. intends to plead guilty to embezzling an astounding $21 million while operating an illegal game room in Lyford, Texas, a town of 2,100 people. He is facing eight charges for running the El Toro Game Room.

Gamez allegedly collaborated with Dominga Ledesma, owner of Brittany’s Shop, which was right across the street. She faces sixteen counts in the scheme. The operation reportedly took place between May 2017 and October 2018.

According to the criminal complaint filed last September, “Gamez and Dominga Ledesma created an indirect payment system for the game room customers using trinkets of silver or silver pellets.”

Lyford game space ordinance enables eight-liners along with permit or even license

Unregulated game rooms housing eight-liner slot machines are illegal in Texas. In fact, both online and retail casinos in Texas are illegal, with the exception of a few tribal casinos.

However, in Lyford, there is a game room ordinance regulating “the exhibition, display, placement, and operation of skill or pleasure coin-operated machines,” also known as eight-liners.

A license must be obtained for up to two machines. If a establishment has more than two machines, it must obtain a license. There cannot be more than six eight-liners operating at the same time within the city of Lyford. The fee for a license is $50,000 per year per establishment.

Owners are also prohibited from having any of these machines within 300 feet of a school, church, daycare, hospital, or residence. The minimum age to play or operate an eight-liner is 18 years old. No game room can operate the machines for profit or outside of the following hours:

• Monday through Wednesday: noon to 12 a.m.
• Thursday through Sunday: 10 a.m. to 2 a.m.

Gamez utilized ‘ fluffy animal exception’ to dress the law

There might be an ordinance in place to allow the operation of eight-liners, but the law also states that no establishment is allowed to award cash prizes, unless the prize falls under the “fuzzy animal exception.” This exception refers to a prize “that rewards the player… from a single play of the game or device of only 10 times the amount charged to play the game or device once, or $5, whichever amount is less.”

For example, if someone plays the machine by placing a 30-cent bet and they win $4, it is considered a crime if they are paid because the amount exceeds 10 times the bet. Possession of a gambling device in this case is considered a Class A misdemeanor. The penalty can be up to one year in jail and a fine of up to $4,000.

An alternative would be to compensate customers with nonmonetary prizes that are worth less than $5.

This is how Gamez attempted to create an exception. He would pay his customers with small silver pellets. They would then go down the street and exchange them for cash at Ledesma’s shop, which is known to deal with precious metals.

INTERNAL REVENUE SERVICE reporting brought on a further look into the procedure

Gamez and Ledesma apparently went through a lot of trouble to evade the authorities, including concealing the true owner of El Toro.

When conducting a cash transaction exceeding $10,000, the law requires patrons to complete FinCen Form 8300, which is then submitted to the IRS and the Financial Crimes Enforcement Network (FinCen).

Gamez reportedly used the name of a deceased elderly man as the owner of El Toro. Later, he was accused of paying someone to act as the owner. A witness informed investigators that Gamez paid $1,500 per month to use their identity on the forms. All of this was done to avoid being tied to collecting illegal income sources.

Additionally, Gamez allegedly obtained permits for the eight-liners by registering them to several different individuals.

Gamez is facing three charges of aggravated identity theft, three charges of creating financial records to evade reporting requirements, and two counts of unlawful use of identification.