But the state Lottery Commission plans to discuss the 48-count indictment against Joe C. Ferrell and his Southern Amusement Co. when it meets next week.
Charges unsealed Monday allege an array of offenses by Ferrell, a former seven-term Democratic lawmaker from Logan County. At least 16 of the counts include Southern Amusement as a co-defendant.
The bulk of the case depicts the 62-year-old Ferrell as atop an illegal gambling racket that began in West Virginia in mid-1995, when he bought Southern Amusement, and later extended into Kent-ucky this decade.
Ferrell also bribed a West Virginia Lottery investigator into aiding Southern Amusement, five of the counts allege.
The Logan-based South-ern Amusement is licensed to lease 675 machines, the maximum allowed for any single business, to bars and clubs that offer the state’s “limited” video lottery.
Of the 37 operators allowed to lease machines to retailers, only one other has as many permits. About 8,100 of the poker- and slot-style lottery machines were hosted at 1,628 bars and clubs across the state last month.
If Ferrell is convicted, prosecutors plan to seize Southern Amusement and all of its gambling devices, among other assets. The value of the proposed forfeitures, which also include seven tracts of real estate and proceeds from the alleged Kentucky gambling, totals at least $5.5 million.
A lawyer for Ferrell, Bob Allen of Charleston, did not respond to a request for comment Wednesday.
The bribery counts allege that Ferrell had encouraged the “Known Lottery Inves-tigator” to seek the post of Investigator II at the state regulatory agency. While not named in the indictment, other records identify her as Carolyn Kitchen of Chapmanville.
Kitchen’s court-appointed defense lawyer, Nick Pre-servati, cited the pending status of the case and declined comment Tues-day. He did say that she resigned several months ago. Not commenting on her identity, Lottery spokeswoman Nikki Orcutt confirmed that the employee involved in the case had left the agency on her own.
The indictment casts Kitchen “as a co-schemer and aider and abettor but not as a defendant.” It alleges that between 2004 and last summer, Ferrell plied her with cash both for services provided to his gambling business and “for the purpose of cultivating and insuring her continuing favoritism and availability to him in his operation of video lottery machines,” the indictment alleges.
The charges describe Kitchen’s services largely as maintaining and repairing Southern Amusement-leas-ed machines, without her agency’s approval and both while on the clock and after-hours. That work in-cluded opening the ma-chines’ sealed compartments housing their special software, the indictment said.
Kitchen may have re-sponded to Ferrell’s service calls on weekends, when the Lottery’s technicians don’t normally work. But there is no evidence that the bribed investigator allowed Ferrell to steal from the devices or otherwise corrupt them, said Orcutt, Lottery’s deputy marketing director.
“If it was ever tampered with, anything it was replaced with would have to be Lottery-approved software, or the machine would shut down,” Orcutt said Tuesday. “It would not come back up for play.”
But the indictment also alleges that Kitchen failed to cite both Southern Amusement and those leasing its machines when they violated Lottery rules and policy. Four of its mail fraud counts further charge that she submitted annual disclosures in which she falsely swore that she had received no gifts or perks from any licensee.
West Virginia began of-fering video lottery mach-ines in licensed bars and clubs in 2002, after outlawing similar, privately own-ed devices found at thousands of locations state-wide and widely believed to be paying out illegally. Southern Amuse-ment provided such “gray” ma-chines until they were banned, and the case’s main racketeering count accuses Ferrell of a hand in that illegal gambling.
Some of the charges involve another Ferrell business, White Amuse-ment, which also provides gambling and “amusement” devices.
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