The Tennessean from Nashville, Tennessee • Page 103

pCCtWBtW3.1W Th SUNDAY 30 HDD 6QffiQfelteD Ex-massage parlor operator was bingo's Mr. BigH Among the charity charters used In Ottis Cato's operations National Energy Task Force AmvetsPost 34 Fraternal Order of Firefighters Black Veterans Affairs Organization Carpetbag Theatre Fraternal Order of Police Lookout Valley Lions Club if i Ml Ottls T. Cato's name rarely appeared on the corporate charters that were the tools of his trade. But the South Carolina bingo gambling kingpin and former massage parlor operator was the behind-the-scenes force In a string of multimillion-dollar bingo halls In Tennessee that operated using fraudulent charters as their fronts. Some bingo Industry figures Jokingly dubbed the white-haired, scowling figure "Mr.

The managers of his bingo halls were nicknamed "Cato's boys." 'They are In the business to make money for themselves." said Eric Pantsari, a former bingo regulator In South Carolina. "Obviously, charity has to be behind it, or they could not once met and that she was warned, "These are some bad cowboys." Cato demanded 60 of the money skimmed from the hall, with the rest to be divided among state bingo regulator WD. (Donnle) Walker, bingo lobbyist James V. (Jim) Long, state Election Commissioner Tommy Powell and two others, a federal Indictment says. Cato Is awaiting trial on federal charges of conspiracy, Illegal gambling, mall fraud and obstruction of Justice stemming from the Memphis incident Three East Tennessee bingo halls operated for about a year as chapters of National Energy Task Force, a South Carolina non-profit corporation seized and controlled by continue to operate the way they do." From Memphis to Chattanooga, Cato and his corps of professional bingo gamblers took advantage of Tennessee's charity bingo laws to operate casino-like bingo halls and fill their own coffers.

Among the disclosures Cato and bis associates seized control of a small, black Memphis church. Holy Family Miracle Temple, in 1986. Corporate documents filed with the state claimed Cato's employees had been given control of the church's charter. The church's minister says she was told to stay away from the hall where her congregation Money off bingo? They found 'it can be done' A shrewd businessman, Cato hired' a prominent Democratic state sena: tor, Bill Ortweln. to plead his case with Secretary of State Gentry Crowell, a Lebanon Democrat wfirn some Chattanooga residents opposed' his move Into their area.

National Energy Task Force Inc. wus a classic Cato deal The non-profit corporation was founded In 1978 as South Carolina Energy Task Force by a group of envi ronmentalists and consumer cotes concerned about the need for developing alternative energy sources. Interest waned. People stopped attending meetings. The charity But the corporate charter rose again as a part of Cato's bingo empire! Documents filed with the South Cu-.

rolina secretary of state's office tn 1984 claimed the group had been re-'-vlved under a new name and the con, trol of a new president Ronald R. Young IL Young Is known by South bingo regulators as the individual who beads up Cato's bingo operations In that state. Also listed on corporate documents for National Energy Task Force Inc." are Cato's wife, Marie Cato, and Tami M-Goode, also known as TamlCuto- and believed by North Carolina aiK thorities to be Cato's Young, Goode and Marie Cato also -are listed as officers of Solar Energy Institute of South Carolina Inc. a reg istered professional bingo manage- ment firm that got 90 of the pro ceeds from the so-called charity games, according to contracts filed there. Founding members of the organlza-tion said they never bad met Cato and do not know how the professional bin go operators got control of their charity.

But one thing is clear about Cato's. deal, said a former member, Timothy Rogers, now a South Carolina tor. "There Is no way we Intended for, -this to happen when we sat down form that organization," .1. known associates and relatives of Cato. The bingo gambling kingpin also owned a Ouulanooga building where a large bingo hall was housed.

The hall, operated under the names of at least four "charities," was purchased by Cato la 1983 for $100,000. One of those "charities" alone paid $76,000 In rent between 1985 and 1987. Known Cato associates operated two other halls In the Quttanooga area. Cato has been described by authorities as one of the biggest professional bingo operators in North Carolina (where such Involvement is illegal) and In South Carolina (where companies linked to Cato had arrangements under which they legally keep 90 of the money generated from the so-called charity games). Bingo Industry observers In Chattanooga relished tales of Cato's lavish lifestyles: his flights into southeast Tennessee aboard his private airplane for meetings of professional bingo gamblers, his movements about town In a sleek Cadillac, his free-spending ways in restaurants and nightclubs.

Before banking on the public's thirst for easy money, Cato traded In physical pleasure with a string of massage parlors. ordered that three massage parlors operated by Cato be dosed. Among the evidence submitted In the case were sworn affidavits In which his female employees claimed he did not mind If they sold their bodies as long as business was good for him. "He wanted his cut," one employee charged. In 1980, Cato pleaded guilty to aggravated assault for attempting to force a 16-yearold girl to perform oral sex on him at a Greenville, S.C, bingo ball he operated.

He was placed on probation for a year. Cato also was reportedly behind a bingo game that boasted some of Tennessee's largest Jackpots before 1 983, according to statements by the operator there to local reporters. Video poker and plnboll machines once were the mainstays of Evelyn Hunnlcutt's gambling business. But the owner of Dell Amusements Co. discovered charity bingo In 1986 as a way to moke a buck for herself.

By 1987, Hunnicutt was making a push to open Nashville's largest and plushest bingo halls, Bingo Casino and Bingo Castle. "It didn't look like there Is any way p. i- IK ville. Purported minutes also claimed that the founder, Anna Gruber, had resigned and nominated Hunnicutt to replace her. It was all a He.

"I don't know anything about this persoa" Gruber, an elderly womaa told The Tenncssean In 1987. "Wedls-solved the group years ago. There Is nothing to It anymore. "They shouldn't be using that" charter. Hunnicutt sold the Help Yourself charter and bingo operation for $60,000 to two Gallatin women, but she and a partner, Nashville businessman Frank Webb, soon began approaching charities about using their names at two new halls.

The halls eventually operated under the name of US. Amputee Athletic Association before being closed down by state officials for fraud and illegal gambling. "She didn't make any bones about the fact that she was a bingo operator," Tenenbaum said. "We understood there bad to be a charitable connection In order for them to do that" Arizona but was run off by the tribe amid allegations they had stolen money from the tribal game. Dennis Ray Stephens, a Fayette-vllle, Tena, bingo operator who once used the names of such groups as the Rev.

White Evangelistic Fund, Franklin County Day Care Center, Southern Lincoln Recreation and Lincoln Em- ployment Training Shop. Stephens, who admitted to a "six-figure" Dilau-did habit became a central figure In the case against bingo regulator W.D. (Donnie) Walker and SJ. King, to whom he paid $30,000 for "protection." Hunnlcutt's first venture Into bingo apparently came with an Ironically named charity charter, Help Yourself Ina, at a Robertson Road halt The charity originally had been Incorporated in 1955 in Memphis to provide semimonthly dinners for cerebral palsy victims. It had been dissolved many years before It resurfaced as the front for a Nashville bingo hall.

Documents filed with state bingo regulators claimed that the group had been reactivated and moved to Nosh- who took advantage of the state's charity bingo laws to enrich themselves. Many are now on their way to prison. Other major figures Include: Virginia Hurst a Knoxvllle bingo operator who once used the names of such groups as Knoxvllle Golden Gloves, E.M. Jelllnek drug rehabllta-ton center and Peter Pan day care. When hard times hit bingo In Tennessee, she began managing the massive Cherokee Indian reservation game in Cherokee, N.C Hurst has been Indicted in connection with an Illegal Cross-ville, Tena, bingo hall IRS agents who raided her home In October found $742,000 strewn about the house.

William S. Harris, a Memphis bingo operator who once used the names of such groups as Tennessee Indian Council, Army-Navy Union and Holy Family Miracle Temple. He has pleaded guilty to conspiracy in connection with those halls. Harris also was linked to a Knoxvllle company with ties to convicted financier CH. Butcher Jr.

That company operated an Indian reservation game In that anybody can make any money" off charity bingo, sold Norman Tenenbaum, who received an offer from Hunnicutt about using his charity's name, the 1 1 UNNiaJTT Assocatlon for Retarded Citizens, at her halls. "But she clearly Intended to. We even said to her that it looked like it wouldn't be all that easy to make money off of. She Just said, 'It can be or words to that effect" Hunnicutt a rugged businesswoman, is one of a few dozen professional bingo gamblers across Tennessee To a burgeoning scandal, many just said, 'So KINGSPORT Feb. 27, 1 989: Tennessee Supreme Court rules that charity bingo is unconstitutional in the case of the Kingsport bingo hall operated by AMVETS Post 21.

In 1986, AMVETS reported donating $1 OS to NASHVILLE April 1987: W.D. (Donnie) Walker otters Sen. Randy McNally $10,000 bribe to vote for horse track gambling bill. 1988: David (Peabody) Ledford otters two $2,000 bribes to Sen. Randy McNally FAYETTEVILLE Juno 1984 to April 1986: S.J.

King and W.D. (Donnie) Walker extort $30,000 from Dennis Ray Stephens, the operator ol illegal bingo hail. June 1983: Bingo hall operator Tom Wiser and family kidnapped and robbed of $5,000. Lincoln County indictment says this was part of charity, out of the gross proceeds of $360,483. to vote tor bingo and waste-disposal bills, Davidson County grand ury conspiracy by bingo financier charges.

William McBee to have seven people, Including state senator, beaten or killed, CHATTANOOGA 1985 and 1986: Three bingo halls near famed Missionary RkJgo account for $3.78 million of the $44.7 million Tennessee bingo halls report taking In. Operators of two of the halls have 6lnce pleaded guilty to conspiracy and tax evasion charges. MEMPHIS February 1986: State election commission member Tommy Powell and 6oven others initiate conspiracy to take over two churches to run a bingo hall and skim its proceeds, federal indictment charges. CROSSVILLE September 1986: Bingo hall, Involving state Rep. Tommy Burnett, opens its doors.

Federal prosecutors charge Burnett and three others with conspiracy, illegal gambling and mail traud. KNOXVULE October 1989: IRS and FBI agents raid the home'' of bingo operator Virginia-' Hurst and seize $742,000 in cash, coins and certificates of deposit. year legislative secretary In 1971 to a administrator. With that power, she became the Illicit bingo industry's advocate Inside Crowell's office, aided at least one Illegal hall and embezzled thousands of dollars from the House-Senate Democratic Caucus campaign accounts she supervised. Publicly, Wright insisted she had nothing to do with bingo.

State Rep. Tommy Burnett a Jamestown Democrat also was backslapplng his way through the hallways of the Legislative Plaza in his quest to be House speaker. All the while, he harbored the secret that he, too, had helped set up a bingo hall that operated briefly in Crossville, Tena, using a fraudulent charter. Whenever bingo came up in a conversation, Burnett would roll his eyes in a characteristic "who cares" gesture, shake his head and walk away. A longtime Burnett chum, lobbyist and former lawmaker David (Peabody) Ledford, continued to roam Capitol Hill in search of payment for his influence with a few key legislators and his ability to deliver their votes.

Avoiding the spotlight was a former partner with Walker and Long In the bingo supply business. State Election Commissioner and Memphis labor leader Tommy Powell A former state representative, Powell had sponsored the original bill In 1 971 that legalized bingo and raffles. The legislation jokingly was known on the House floor as the "Free Tommy Powell" bill because he previously had been arrested for an automobile raffle conducted by his union. Federal and state Investigators had collected evidence quietly for more than a decade about Powell's Involvement with bingo halls across Tennessee and with bingo figures from Miami. His former seat mate in the House, Judge Ira Murphy, had been sent to prison in 1986 for his part in a bingo scam.

Powell, it seemed, was untouchable. Also lurking behind the scenes was Benton County developer William McBee, a money-tossing developer who operated a hotel in the shadow of the state Capitol that was frequented by legislators. He also tried to worm his way close to Gov. Ned McWherter by donating $21,600 to bis 1986 campaign. McBee had helped finance Walker and Long's bingo supply house in 1985, had loaned $15,000 to Wright and $12,000 to Burnett and had signed another $22,000 note for pro-bingo state Sea Jim Lewis, D-South Pittsburg.

Later, an associate would say McBee boasted of getting payoffs from the state's bingo halls. But business as usual was about to end. In the midst of bingo's inner circle, the federal government had placed FBI undercover agent Ken Walsh. Posing as an Atlanta financial consultant whose clients included Bingo Systems, Walsh established himself among Walker, Long, Wright Ledford and others on Capitol HilL He hired Ledford to lobby on bingo matters. To them, Walsh was known as Ken Wllsoa Huddled with bingo industry figures over drinks at the Hyatt Regency's Sessions Lounge or for secret strategy sessions in Walker's Hermitage Hotel room, Walsh quietly spied on them as they grew frustrated with the seemingly non-stop newspaper disclosures about their illicit Industry and with the developments that followed.

State Attorney General J. Michael Cody, a former federal prosecutor, was trying to get a case to the Tennessee Supreme Court that would test the constitutionality of the state's bingo laws. Cody quickly came to be reviled by the bingo Industry. Secretary of State Crowell, armed with the same law under which bingo permits routinely bad been approved, ordered a revamping of the regulatory efforts In his office and a turnover in personnel An attorney was hired to up, unknown even to the reporters who were digging Into the corruption-stained Industry. Marshaling their forces in the probe, code-named "Rocky Top," were the FBI, the Tennessee Bureau of Investigation and the Internal Revenue Service.

Spurred on by the same allegations that triggered the newspaper probe, an undercover FBI agent was establishing himself on Capitol Hill. A Republican state senator was working undercover for authorities because of bribe offers that had come bis way. And federal authorities across Tennessee were preparing to follow up on allegations raised by the newspaper once the undercover phase was over. Throughout 1 987, however, It was still crooked business as usual In the state's charity bingo industry. New bingo halls were opening to a rush of gamblers.

Nashville pinballvldeo poker distributor Evelyn Hunnicutt had just opened Bingo Casino in Madison and was about to open Bingo Castle in South Nashville. Outside the halls, gaudy signs lured the gamblers with promises of fast action. Documents on file with the state meekly described Hunnlcutt's games as charity operations for the VS. Amputee Athletic Association. Longtime bingo operations from Sam McJunkin's Comprehensive Engineering Assistance Association in Chattanooga to Gary Jones' Church of Jesus Christ First and Second Coming of the Third Testament In Nashville to Virginia Hornbuckle's Inner Man Church of the Future in Memphis still echoed with cries of "Bingo!" as they drew hundreds of gamblers each night Blue-haired grandmothers and hunchbacked factory workers cared little about whether any charity actually benefited as they sometimes dropped several hundred dollars a night at their local halls.

Their only concern: the jackpot Lawyers suggested to their bingo clients that the newspaper Investigation would be short-lived and that they should just lay low until It had ended. Cigar-chomplng bingo Industry lobbyist W.D. (Donnie) Walker, perhaps the most notorious figure in the whole scandal, was wheeling and dealing on Capitol Hill while advising professional bingo gamblers across Tennessee how to run their charity scams. For some four years, Walker had been the chief bingo Inspector in the secretary of state's office, taking payoffs from bingo gamblers while helping them to locate charity charters to use as fronts. Then, he would push their permits through the office.

After becoming a lobbyist Walker had offered $10,000 to state Sen. Randy McNally, R-Oak Ridge, In April 1987 for his vote on a bill legalizing pari-mutuel betting on horse racing. McNally, who was cooperating with Investigators, refused the bribe. At the same time, Walker's longtime friend and South Pittsburg, Tena, neighbor, James V. (Jim) Long was running Volunteer Distributing, a lucrative bingo supply company they and others had formed in 1985 while Walker was still a bingo regulator.

A competing firm, Bingo Systems, had been run out of the state. Long, a mild-mannered figure who lobbied for the bingo Industry before turning control over to Walker, had headed a secret organization of professional bingo gamblers, known as The Association, when Walker was a regulator. The gamblers paid Long thousands of dollars a month for his and Walker's help in getting their bingo permits from the secretary of state's office. Meanwhile, from an office In the state Capitol, Mary Sue Wright was wielding enormous power as the trusted assistant to Secretary of State Gentry Crowell. Wright a fastidious power-grabber, had gone from being a Ktnt Also discovered was a $24,000 check from Memphis -racing promoter Charles McVean written to Walker the' day before the Senate vote on pari-mutuel gambling.

The" $10,000 offered to McNally was to have come from that check. Three armed thugs kidnapped and robbed a Fayette-' ville, Tena, bingo operator June 11, 1988 in what could have been the beginning of a round of violence. Ap- -prehended by TBI agents, the men claimed to have beeh hired by McBee, the free-spending developer, and that his; hit list Included Walker, Long and Lewis. i.j McBee was upset that his payoffs from the bingo InduV try had stopped, the thugs said. Having reintroduced Walker to FBI Special Agent.

Ken Walsh and presented him with other irrefutable eyi- dence of his misdeeds, prosecutors paraded the former bingo regulator and lobbyist through courtrooms here and in Chattanooga Jaa 26, 1989 as he pleaded guilty to bribery, extortion, conspiracy and tax evasion charges. -4 Gone was the ever-present mischievous grim, replaced -by the solemnity that came with the reality that he was on his way to federal prisoa i It would mark the beginning of a year when the shining images of nappy bingo players would be replaced by, darker ones: Long dodging television cameras as he entered a feder-' courtroom to admit his crimes. Powell and Ledford being led Into court In handcuffs after being Indicted. Tommy Burnett surrendering himself to federal author-, ties after failing to convince a grand Jury of his inno-cence, Wright forced to resign in disgrace. But the fatal blow was dealt February 27, 1989 when the Tennessee Supreme Court upheld Kilcrease's decision striking down the state's bingo laws.

Halls across the state' i were forced to shut dowa The Illegal gambling Industry that had spewed cornirV tion across Tennessee had been crushed. head the regulatory efforts. Wright was removed from any bingo responsibilities. Professional bingo gamblers who once had run wide open under the gaze of bingo regulators suddenly found themselves ordered to close their doors. Meanwhile, almost daily newspaper disclosures of bingo abuses fueled a strong bingo reform movement In the General Assembly and caused panic within bingo's inner circle.

Some lawmakers wanted to outlaw the whole game. Others wanted to clamp down so hard that professional gamblers would be forced to head for the borders. Ledford, concerned about a bill sponsored by McNally to create state-run bingo supply companies, became so desperate that he got $2,000 from undercover agent Walsh to pay McNally for not proceeding with his legislation, prosecutors say. Like dominoes, the conspiracy began collapsing: Davidson County Chancellor Irvin H. Kllcrease ruled March 1 1, 1988 that the state's bingo laws were unconstitutional because bingo is a lottery and the Tennessee Constitution prohibits the legislature from authorizing lotteries.

Kilcrease's position contradicted an earlier decision by a fellow chancellor, Allen High, that bingo was not a lottery. A legislative conference committee, meeting late into the evening April 27, 1 988 with Walsh looking on, hammered out a compromise bill that reduced the scope of gambling within the state's bingo halls, set strict requirements on the amount that had to be donated to charity and enacted stringent accounting rules everything the powerful bingo lobby had tried to kllL Federal agents, armed with search warrants and subpoenas, swooped down May 26, 1988 on the homes and offices of both Long and Walker, where they found documents relating to The Association. In addition, agents confiscated files of The Association from the group's accountant, James L. Jackson of Chattanooga..