After learning that a convicted criminal with ties to organized crime could benefit from a $75 million land purchase in Everett, executives at Wynn Resorts renegotiated the deal to address state investigators’ concerns that a criminal could improperly benefit from the state’s casino industry, according to testimony Wednesday in a federal trial in Boston.
Karen Wells, head of the Investigations and Enforcement Bureau for the state Gaming Commission, told a federal jury that Wynn Resorts renegotiated the contract with the landowner, FBT Everett Realty, and instead paid $35 million for the 30-acre parcel, the fair market value for a development on the property other than a casino.
The new deal was Wynn’s proposed solution to the concerns of Wells and other state officials that organized crime associate Charles A. Lightbody was a secret partner in FBT Everett Realty, and that he would benefit from a purchase price that was inflated only because the land, purchased to build a casino, was tied to the state’s gambling industry.
The deal salvaged Wynn’s application for the region’s only casino license, which could have been jeopardized by Lightbody’s involvement, Wells said.
“Historically, there’s a potential association with organized crime and the gaming industry — I was concerned about that,’’ Wells told a federal jury. “Our mandate was to ensure public confidence in the licensing process.’’
Wells testified Wednesday in a federal trial alleging Lightbody and two codefendants — FBT Everett partners Dustin DeNunzio and Anthony Gattineri — defrauded Wynn Resorts and state regulators by attempting to hide Lightbody’s 12 percent interest in FBT Everett Realty.
According to prosecutors, state law prohibits convicted felons from benefitting from the state’s casino industry. The state Gaming Commission would not have awarded a casino license to Wynn if it determined Lightbody would have benefitted from the sale, according to prosecutors.
“I was very concerned based on what we had uncovered,’’ Wells said. “There was a lack of transparency and honesty during the entire investigative process that really impacted my view of how to deal with this.’’
Lawyers for the three defendants say that Lightbody sold his interest in the property to Gattineri before a deal was reached to sell the land to Wynn. They also argue that prosecutors have misinterpreted state law, and that Lightbody could have been involved in the sale. Therefore, they argue, no fraud was committed.
Under questioning by defense attorneys, Wells acknowledged that she could not cite state law that prohibits a convicted felon from selling land to a casino operator.
She also acknowledged that investigators did not look into comparable land sales for a casino in Springfield, including the sale of land housing a barber shop that was connected to organized crime.
Wynn won the only casino license reserved for Greater Boston after renegotiating the contract with FBT Everett.
The three known FBT Everett partners, DeNunzio, Gattineri, and Paul Lohnes, also signed affidavits attesting that they had a combined ownership of FBT Everett Realty and that no one — other than consultants they identified — would benefit from the sale of the land. Lohnes has not been charged.
The case is being closely watched by casino industry insiders who have questioned whether Wynn Resorts knew of Lightbody’s alleged ownership in FBT Everett Realty, and if so, when.
The trial is expected to last four weeks.
Milton J. Valencia can be reached at milton.valencia@globe.com. Follow him on Twitter @MiltonValencia
