EASTON SOCIAL CLUB AND TWO MEMBERS OF BOARD OF DIRECTORS CHARGED IN GAMBLING CONSPIRACY

"Order of Fleas" Allegedly Generated More Than $8.4 Million Between 1994 And 2003

February 19, 2004 - PHILADELPHIA – United States Attorney Patrick L. Meehan today announced the filing of a seven count information* charging the Order of Fleas, a private mens social club in Easton, Pennsylvania; two members of its board of directors; and two vendors of video poker machines for gambling and related offenses.

The information charges that the defendants ran a gambling business at the Order of Fleas, in violation of federal and state law, which generated between January 1994 and June 4, 2003 gross revenue of $8,415,636 from video poker machines leased from defendants Anthony Hanni and Habouk Shumar who maintain a vending amusement company in Easton. From the gross revenue, the Fleas Club paid out gambling winnings to members of the Club and a leasing fee to vendors of the poker machines. The cost to the Order of Fleas for leasing the machines was 2% of the gross revenue. It is alleged that Hanni and Shumar received approximately $1,899,451 for the leasing of the video poker machines. From their take, Hanni and Shumar kicked back to board member defendants Russell Hixon and James Durnin, Sr. approximately $1,000 per month. They also kicked back $10,000 each summer and Christmas to Hixon and Durnin which they split with other board members, officers, and bartenders.

"This was a world of bagmen, kickbacks, and bundles of cash," said Meehan. "We're not talking about a nickle and dime poker game played in a smokey back room once a week. This was a well orchestrated conspiracy to operate below the radar of federal reporting requirements to the tune of more than $8 million over almost 10 years."

It is further alleged that the Order of Fleas structured the cash deposits of their gambling revenue into their bank accounts in amounts less than $10,000 to avoid currency transaction reporting requirements of the banks. Federal law requires that a financial institution file with the Commissioner of Internal Revenue a report of all currency transactions involving more than $10,000. These reports are referred to as "Currency Transaction Reports" or "CTRs." The law forbids any individual or entity from structuring or assisting in structuring currency transactions with a financial institutions for the purpose of evading the foregoing reporting requirements. It is charged that approximately $8,033,292 in deposits were structured by the Order of Fleas between September 20, 1995 and June 4, 2003.
It is further alleged that the Order of Fleas paid cash salaries to part-time employees, supplemental cash income to full-time employees, and cash bonuses to officers and board members in a manner to evade the payment of income tax and employment tax.

It is further charged that vendors Hanni and Shumar received money from other social clubs in Lehigh and Northampton Counties for the leasing of video poker machines. The money was then channeled through an employee's bank account to disguise their involvement in gambling activity and their receipt of gambling proceeds. Approximately $2,662,000 was laundered through this account between March 31, 1997 and June 15, 2000.

All of the defendants are charged in one count of conspiracy to maintain a gambling business, in violation of 18 U.S.C. § 371 and one count of maintaining a gambling business, in violation of 18 U.S.C. § 1955.

The Order of Fleas is also charged with one count of conspiracy to structure financial transactions, in violation of 18 U.S.C. § 371; one count of structuring financial transactions, in violation of 31, U.S.C. § 5324(a)(3); and one count of conspiracy to defraud the United States by impeding, impairing, obstructing, and defeating the lawful functions of the Internal Revenue Service.

Anthony Hanni and Habouk Shumar are also charged with conspiracy to commit money laundering, in violation of 18 U.S.C. § 371 and money laundering, in violation of 18 U.S.C. §1956.

If convicted, the defendants face the following maximum sentences:

OOF: 10 years probation, $2,000,000 fine, $1,600 special assessment, and forfeiture of criminal proceeds.

Hanni and Shumar: 35 years imprisonment, a $1,250,000 fine or a fine of $500,000 plus twice the value of the property involved in the money laundering transactions, whichever is greater, 5 years supervised release, $400 special assessment, and forfeiture of criminal proceeds..

Hixon and Durnin: 10 years imprisonment, $500,000 fine, 3 years supervised release, $200 special assessment, and forfeiture of criminal proceeds.

The case was investigated by the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, and the Pennsylvania State Police Bureau of Liquor Control Enforcement and has been assigned to Assistant United States Attorney Robert E. Goldman.

DEFENDANT	ADDRESS	AGE [Date of Birth]
The Order of Fleas	601-617 Reynolds Street, Easton, Pennsylvania
Anthony Hanni	400 Reeder Street, Easton PA.	4/4/95
Habouk Shumar	4835 Charles Street, Easton, PA.	1/4/49
Russel Hixon	535 Centre Street, Easton, PA.	1/2/46
James Durnin, Sr.	1344 Camelot Drive, Easton, PA.	7/17/38