I think his response to it sums it up
Shady reporting catches up to Bert Caldwell
Galaxy Gaming’s and Robert Saucier’s response to the Bert Caldwell article of August 15, 2010.
People familiar with the history and lore of Las Vegas will likely remember casino legend Bob Stupak who passed away last year on September 25, 2009. Known mainly for creating and operating Vegas World Casino and later the Stratosphere Tower, Hotel and Casino, those who have followed his colorful career may also know that in 1974 he opened a small casino known as “Bob Stupak's World Famous Million Dollar Historic Gambling Museum and Casino.” Stupak used to joke, “The name was about ten feet longer than the casino." His “museum” concept was designed to attract people to his casino but Stupak had a problem, namely his limited bankroll prohibited him from acquiring authentic historic pieces to put on display in his museum. Not to worry, Stupak, (aka “the Huckster”), just made stuff up. One such so-called artifact was a cigarette with some lipstick on it that he put into a display with a plaque that read, “This was the alleged cigarette that Marilyn Monroe was smoking when she played roulette.” Bob later confessed the fraud and proudly declared, “If you used the word ‘alleged’ all these things you could just make up.”
It is unknown whether or not writer Bert Caldwell knew Bob Stupak, but it is obvious that he subscribes to Stupak’s theory that it’s OK to make things up to suit his purpose if he just includes words like “alleged” or “allegedly.” In this case, Caldwell, employed by the Spokesman-Review, a Spokane, Washington newspaper, wrote “Saucier already hot-footed to Las Vegas, allegedly having pocketed an $825,000 loan secured by the Mars.” Ah-ha! There’s that word “allegedly.”
So in case you are not familiar with the Spokesman-Review newspaper, allegedly their official mission statement is, “We never let the facts get in the way of a perfectly good story.” See how “allegedly” works so well here? Bob Stupak was right, there’s no need to tell the truth if you just include this magical word.
Obviously, business reporter Caldwell knew or should have known that the statements he made in his article about Mr. Saucier were false. But of course telling the truth wouldn’t support the interesting, but fictional, story he wrote and besides, what fun would that be? Although, maybe we shouldn’t be too hard on Mr. Caldwell or the Spokesman-Review for their tabloid journalism approach. After all, newspapers across the country are disappearing at an alarming rate and reporting accurate business news items probably doesn’t sell too many newspapers these days. Also, and not to be insulting to the fine citizens of Spokane, but perhaps Bert Caldwell has had a difficult time finding real business news besides reporting the latest closure of a drive-through espresso stand. Presented with a deadline and no real news to report, it seems as if Caldwell decided it would be a lot more fun to dust off a thirteen year old business story about a closed casino and add some real pizzazz to it by making stuff up, just like Stupak. After all, why report the facts when the fable can be so much more entertaining?
For those of you reading this who (1) don’t believe everything you read in the newspapers; (2) consider yourself open minded; and (3) are interested in knowing the true pertinent facts in this matter, then you should be interested in following paragraphs which reveal the actual facts. The difference with our version of the facts is that they are indeed the truth and are corroborated by the actual evidence supporting these claims. (Note also the absence of the word “allegedly.”)
1. In May 1997, Sherron Associates Loan Fund V (Mars Hotel) LLC, a group headed by C. Edward Springman, a Seattle area promoter, invested in the Spokane Mars Limited Partnership (“SMLP”). The promissory note stated the loan was for $825,000, but Mr. Springman personally pocketed $170,000 of the loan’s proceeds right off the top. In addition, there were other “loan fees” collected and a stipulation that Springman’s company receive $5,000 every month as an “administrative fee.” The balance of the net proceeds were delivered directly to an unrelated party who had provided a construction loan on the Mars Hotel and Casino project which had come due. Mr. Saucier never received a penny of these loan proceeds and in fact, he never received any compensation in any form, save for reimbursement of some out of pocket expenses.
2. The loan was arranged by Billy Anders, SMLP’s General Manager and President of SMLP’s General Partner, the Mars Hotel Corporation. Springman, a long-time friend of Anders, held the Mars Hotel and Casino property as collateral, but still required Mr. Saucier and others to co-sign the loan on behalf of SMLP.
3. Curiously, Anders never made a single payment on his buddy’s loan and SMLP subsequently filed for bankruptcy. Anders was investigated for questionable conduct and his employment was terminated. Springman then ordered his attorney to file suit against SMLP’s approximately 30 investors and ultimately obtained a judgment against Mr. Saucier and others.
4. The Mars Hotel and Casino closed in November 1998 and the vacant buildings caught fire in July 1999. Mr. Saucier and his wife, who were creditors, lost their life’s savings in the Mars Hotel and Casino project. In addition, Springman foreclosed on their home and took other assets, yet he did not apply anything he collected toward the judgment amount. Mr. Saucier left Washington in November 1999 and headed for Las Vegas with about $200 in his pocket.
In addition to being completely wrong about the 1997 loan, Caldwell also failed to accurately report the Court of Appeals August 5th ruling. Caldwell wrote, “The judges said Bellevue-based Sherron Associates Loan Fund V (Mars Hotel) LLC was entitled to pursue a 1998 judgment against Saucier obtained by a former LLC, or limited liability company.” Here, Caldwell didn’t even take advantage of using the word “allegedly.” We are not sure where he came up with this one, but apparently he is not reading the same ruling that is on record. Indeed, his statement would not be even possible since Sherron Associates Loan Fund V (Mars Hotel) LLC has not existed since May of 2002. Shame on you Bert Caldwell!
The real facts surrounding this matter probably aren’t very newsworthy which is likely why Caldwell avoids them like the plague. Not that everything he reported is inaccurate. He did a decent job of copying certain items from the Company’s disclosure documents filed with the U.S. Securities and Exchange Commission. For example, Galaxy Gaming did become a public company last year and it did recently report its first profitable quarter. Also, it’s accurate that Sherron Associates is being sued for “various abuses of process in the litigation and their malicious attempts to improperly enforce a judgment.”
But Caldwell did not act alone in embellishing this story. Clearly Springman and his Seattle attorney Kevin Bay have their fingerprints all over this attempt to discredit Mr. Saucier. Their participation here is not surprising since throughout the litigious history involving these parties, Springman and Bay have continually made egregiously false statements, both verbally and in documents filed with various courts in Nevada and Washington. And in Caldwell’s article, Bay is quoted as saying, “Saucier has constantly shifted ownership of his assets to frustrate creditor’s.” Our response to Mr. Bay’s claims is as follows:
“After lengthy deliberation at the highest executive levels and extensive consultation with our legal department, we have arrived at an official corporate response to Kevin Bay’s claims regarding our CEO. — Liar, liar. Pant’s on fire.”
Springman and Bay have never been able to prove any of their outrageous allegations, but they still keep inventing new ones. Despite Caldwell’s remarks to the contrary, the status of a judgment against Mr. Saucier is still unresolved. Springman has played a shell game with various entities he controlled and he, through his attorney Bay, have continuously lied to the courts claiming they owned the judgment when in fact they do not.
Which begs the question, what is Galaxy Gaming, Inc.’s interest in this matter since there is no judgment nor has there ever been a judgment against the Company? Quite simply, Galaxy Gaming was sued by Sherron in 2008. Sherron claims the Company is responsible for its CEO’s personal obligations in this matter even though the events between Springman and Saucier occurred over ten years before Galaxy Gaming, Inc was even formed. Why is Sherron suing Galaxy Gaming then? In the words of the notorious bank robber Willie Sutton (aka “Slick Willie”) when asked why he robbed banks, Sutton replied, "Because that's where the money is." Springman has absolutely no claim against the business interests of Galaxy Gaming, yet his greed combined with his and his attorney Bay’s propensity to lie to the courts probably makes him believe it is worthwhile to roll the dice and maybe get lucky with some judge somewhere or otherwise put enough pressure on Galaxy Gaming until it caves in and succumbs to their tactics and pays the judgment.
Their sole legal theory as to why Galaxy Gaming, Inc. is responsible for the disputed judgment is that the Company is the alter-ego of its CEO. What does alter-ego mean? In essence, they must prove Galaxy Gaming and its CEO are one and the same. In legal terms this means the Company has no separate legal identity from Mr. Saucier. The hurdles to overcome in order to prove alter-ego are extremely difficult in any case, but especially difficult with a Nevada corporation. Further, if you ask any lawyer well-versed in this type of litigation about what it takes to prove alter-ego against a fully reporting publically held company such as Galaxy Gaming, they will tell you it is as likely as Elvis reappearing at the Las Vegas Hilton any time soon.
The Company will continue to defend itself against this unwarranted attack. Litigation is never fun and usually very unproductive, but this fight came to us and we must defend ourselves until it is resolved. For nearly two years this litigation involving the Company has been stayed until a final ruling on the judgment is made, which could take several more years. In the meantime, we will continue to focus on growing the Company and increasing shareholder value.
Our opponents in this litigation can continue to lie to the courts and to the media for only so long before it catches up to them. Ultimately, we should have our day in court and once their deceit has been brought to light, we expect to prevail. And when the record shows their multiple perjuries, deceptions and frauds, Mr. Caldwell will have an entirely new entertaining story to tell. Only this time, he will not need to include the word “allegedly.”
