NC House members Tim Moffit and Tom Murry received campaign contributions from two South Carolina men who have since been indicted on charges of illegal gambling and money laundering totalling $386 million.
The campaign committee of Tom Murry, NC House District 41, received a $2,000 check from J Michael Caldwell of South Carolina, listed as "President" of a company simply stated as "Gateway", on 1/29/2013, one day before the North Carolina State House reconvened (after a 1/9/2013 organizational session). On the same day, 1/29/2013, the campaign committee of Tim Moffitt, NC House District 116, received a $2,000 check from Bobby Mosley of South Carolina, listed only as "Principal" with no employer notation. Caldwell is Mosley's son-in-law and together they ran a gambling enterprise spanning multiple corporate entities and over 600 internet cafes in multiple states.
On 8/14/2013 an indictment was entered in federal court in South Carolina naming J Michael Caldwell, Bobby Mosley, Sr., Gateway Systems, LLC, Gateway Gaming, LLC, Frontier Software Systems, LLC and Frontier Gaming, Inc, as defendants on one count of conducting an illegal gambling business and one count of money laundering related to the alleged illegal gambling. It has been described as "the biggest gambling ring bust in South Carolina history."
The indictment was unsealed in October 2013 when federal agents arrested Mosley and Caldwell and seized $84 million in assets related to a $242 million gambling count and a $144 million money laundering count. While the defendants initially pled "not guilty" the case dragged out as they sought a rare mediated resolution, as opposed to a plea agreement or trial. Over the course of the year some of the seized assets were returned, including a $1.3 million aircraft, and some of the travel restrictions relaxed. However, the settlement was rejected by the US Department of Justice and last week on 9/25/2014 an order was issued by Judge Bruce Howe Hendricks to continue the case into the next session of the South Carolina Federal District Court in December 2014 so that it can go to trial without interruption.
At the time of the Murry and Moffitt donations in 2013 these entities had a presence in North Carolina as Frontier North Carolina, LLC, a Delaware registered company. The company was represented by lobbyist Dean Plunkett and lobbyist filings listed company attorney Nichole Andrighetti as the Authorized Officer. Plunkett achieved notoriety in 2012 over a relationship with Thom Tillis's policy advisor Amy Hobbs, who subsequently resigned with a generous severance payment.
In 2012 Plunkett, as a lobbyist, represented another internet gambling concern which operated in North Carolina as Innovative Entertainment of North Carolina, Inc. The then parent entity was Arcola Systems of Minnesota, with a presence in Florida as Arcola Systems Florida. South Carolina based Andrighetti, previously Gateway outside counsel specializing in patents, served for a time as Arcola's counsel in the southeast while Arcola and Frontier/Gateway attempted to merge their gambling interests in the region.
Arcola executive Brad Olah even moved to South Carolina to implement the plan. Andrighetti's roles became a point of contention as the Arcola/Frontier deals soured, according to court documents. It is characteristic of the industry for corporate structures, entities, names, relationships, patents and software to be in a constant state of flux as they adjust to legislative restrictions. That state of flux provides hazards and opportunities. Resulting lawsuits in North Carolina and Florida in late 2012 floundered on lack of clarity on jurisdiction related to the states of residence of the members of various LLCs, as opposed to the registration of the LLCs themselves. The Florida case was dismissed while the North Carolina case was settled. In December 2012 the NC Supreme Court reinstated a ban on sweepstakes café gambling, with an effective date of 1/3/2013.
A search of campaign reports, electronic and paper, did not return records of contributions from Caldwell to any North Carolina legislator other than Murry, nor any contribution from Mosley to any North Carolina legislator other than Moffitt. Murry and Moffitt are seatmates on the House floor. Murry serves as a vice-chair of the Regulatory Reform Committee chaired by Moffitt. Moffit serves as a vice-chair of the Commerce and Job Development Committee chaired by Murry.
While Moffitt and Murry did sponsor an unsuccessful bill, HB 809, to allow roulette, blackjack, poker, craps, keno, and merchandise wheels of fortune at non-profit "casino nights" they did not sponsor legislation related to relaxing restrictions on internet cafes or online gambling. Any appetite for such legislation was effectively killed by Democracy NC’s revelations in March 2013 about the full extent of political donations by, and related to, embattled sweepstakes operator, Chase Burns, who gave more to General Assembly candidates in the 2012 cycle than any other individual donor.
The singularity, and timing, of the contributions to Murry from Caldwell and to Moffitt from Mosley on the same day in 2013, while not on the scale of those of Burns, would suggest some awareness of origins, rather than attribution to random generosity, or the luck of the draw.
Crossposted from gregflynn.org