St. Paul bar owners were indicted Wednesday on federal gambling and money laundering charges

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2 bar owners indicted on gambling charges
Paul Gustafson, Star Tribune

Published April 3, 2003

St. Paul bar owners Walter G. Awada and Gary A. Erickson were indicted Wednesday on federal gambling and money laundering charges in connection with what authorities called a large sports bookmaking operation.

The indictment alleges that Awada, owner of Awada's on Plato on the West Side, and Erickson, owner of Erick's Bar on the East Side, conspired to conduct an illegal gambling business with alleged bookmaker Douglas A. Sabby.

The bar owners allowed Sabby, 57, of Vadnais Heights, to operate his sports bookmaking operation in their bars and assisted him in receiving and paying off bets, the indictment alleges. Awada, who owns three area bars, and Erickson also are alleged to have helped Sabby launder gambling money by cashing checks for him. In addition to those three men, 11 other people have been charged.

U.S. Attorney Tom Heffelfinger said the size of the gambling ring was "amazing." The indictment states that Sabby at times would receive about $1 million a month in wagers and that a bettor known as "Junior" paid Sabby $853,200 in lost wagers between June 1997 and January 2002.

Awada cashed at least 12 checks from Junior totaling $60,000 for Sabby, while Erickson cashed two checks totaling $10,000 for him, the indictment states. In all, 49 checks totaling $245,000 were cashed by various bar owners for Sabby, authorities said.

Heffelfinger said Sabby "could not have engaged in this size of an operation, especially handling all those checks, without the cooperation of many other people."

Earl Gray, an attorney representing Awada and Erickson, said the bar owners have done nothing wrong. Sabby was a regular customer whom Awada and Erickson have known for years, Gray said, and they simply cashed checks for him, a service they offer to other customers as well.

"They [prosecutors] may have an indictment, but they have to prove my clients knew these checks came from bookmaking proceeds," he said. "I've never heard of a bookmaker being paid by check, so how is the bar owner supposed to know a check he's cashing is gambling proceeds?"

Gray denied that his clients shared any gambling proceeds with Sabby. He noted that the indictment states that Awada and Erickson shared the gambling proceeds through Sabby's regular payments for food, drink and other items.

"He [Sabby] has been buying lunch and drinks in these bars for over 25 years. Big deal," Gray said.

Awada, 57, of Mendota Heights, is charged with conspiracy to conduct an illegal gambling business, conspiracy to commit money laundering and 12 counts of money laundering to conceal. Erickson, 57, of St. Paul, is charged with conspiring to conduct an illegal gambling business, conspiracy to commit money laundering and two counts of money laundering to conceal.

Big ring

The U.S. attorney's office also filed charges against many others in connection with the alleged gambling ring, including Pub East owner Steven F. Trumble, 50, and Kevin J. Kelly, 51, a part-owner of Joe and Stan's Bar.

The others charged in the case are Tanya Y. Pizel, 41, of Vadnais Heights; Donald R. Rose Jr., 64, of St. Paul; Renee M. Peltier, 45, of St. Paul; John J. Kelly, 71, of St. Paul; Walter T. Swanson Jr., 67, of Brooklyn Park; Daniel C. Neisen, 40, of Belle Plaine; Dennis R. Neisen, 40, of Gaylord; Timothy J. Weiss, 44, of St. Paul, and John E. Boss II, 36, of Edina.

Sabby faces 42 separate charges, including operating an illegal gambling business, 20 counts of money laundering and eight counts of evading taxes.

Authorities also allege that Sabby gave Trumble $178,300 to hold for him at Pub East in January 2002. The money was put in a box and buried in the dirt floor of the bar's basement. When authorities searched the bar Jan. 28, 2002, Trumble showed them where cash was hidden in the basement rafters but did not tell them about the buried money.

So far, none of the people indicted or charged in the case has been arrested or made court appearances, said Karen Bailey, spokeswoman for the U.S. attorney's office.

A spokesman for State Auditor Pat Awada said Wednesday that Awada's husband is a nephew of Walter Awada, but that her family has no business connections to him or his bar.

this is a sad story, douglas is a very nice man being convicted of a victim-less crime.

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Suspected St. Paul bookie's record dates to 1970s

Paul Gustafson and Tony Kennedy, Star Tribune

Published April 4, 2003


The man at the center of what authorities have described as a large sports bookmaking operation in St. Paul has a history of bookmaking arrests dating back to the early 1970s.

Douglas Arthur Sabby, 57, of Vadnais Heights, also has repeat drunken-driving convictions and was last picked up by St. Paul police in 1998 while driving with a blood-alcohol concentration of .28 percent, nearly three times the legal limit. During that arrest, Sabby was found to be in possession of several football "tipboards" and 74 $100 bills.

Frank Ball, director of the Alcohol and Gambling Enforcement Division of the state Department of Public Safety, acknowledged Thursday that Sabby has been a known bookie in St. Paul for decades. But in recent years, Ball said, Sabby's alleged criminal enterprise had grown to encompass $1 million in bets during some months.

Ball said a three-year investigation with help from the FBI resulted in federal charges against Sabby last month and against two St. Paul bar owners and 11 other people this week.

"We've been tracking this guy for a long time," Ball said. "This guy's whole lifestyle is playing sports book.

"It may be good fun for some guys at the bar, but the enterprise just gets bigger and bigger and bigger" and competes with legalized forms of gambling, Ball said.

In limited respects, Ball has likened Sabby to legendary gangster Al Capone.

"I deny that he's in the same category as Al Capone . . . . My client is a nice guy who's a bookie," said Joe Friedberg, Sabby's attorney.

The investigation followed Sabby as he made rounds of several bars. Some of his phone conversations were taped and federal agents simultaneously searched several bars and houses Jan. 28, 2002. On Wednesday, bar owners Walter G. Awada of Awada's on Plato on the West Side and Gary A. Erickson of Erick's Bar on the East Side were indicted on federal gambling and money-laundering charges.

Erickson, working at his blue-collar establishment early Thursday afternoon, declined to comment but patrons who were seated nearby and drinking beer were supportive of him.

One customer, who declined to give his name, pointed across the street to where 3M Co. is tearing down an abrasives plant that provided good jobs in the neighborhood. The plant closing by 3M executives is the real crime in the neighborhood, the customer said.

At Awada's on Plato, bartender John Ahlstrom said Walter Awada gathered employees Thursday before lunch to apologize for any inconvenience or embarrassment that may have resulted from the gambling allegations. Ahlstrom said Awada assured employees that he is innocent and that the publicity would die down.

"It's all bogus," Ahlstrom said of the charges against his boss.

He said many Awada employees know Sabby because he drinks at the bar.

"Doug is a good customer. That's all he is," Ahlstrom said.

Prosecutors have alleged that Walter Awada cashed at least 12 checks totaling $60,000 for Sabby, while Erickson allegedly cashed two checks totaling $10,000 for him. Ahlstrom said cashing checks for well-known customers is a tradition.

Documents in the gambling case describe John E. Boss II, 36, of Edina, also charged in the case, as a major customer of Sabby. Boss, also referred to in charging documents as "Junior," allegedly paid Sabby $853,200 in lost wagers between June 1997 and January 2002.

Boss' name shows up in state campaign finance records as a contributor to the Republican Party, Gov. Tim Pawlenty and to Sen. Norm Coleman, the former mayor of St. Paul. For example, Boss gave $909.35 to the Pawlenty for Governor campaign last year, including $159.35 worth of food for a fundraiser.

In the campaign finance reports, Boss lists his employer as General Office Products Co. of St. Louis Park. In one report, where Boss gave $5,000 to the Republican Party of Minnesota in 2000, he listed himself as president of the firm.

Earl Gray, Boss' attorney, said he should not be prosecuted, in light of his heavy gambling losses to Sabby. The first court hearing in the case will be Boss' initial court appearance, scheduled for April 10 in front of Judge James Rosenbaum.

"In my 32 years as a prosecutor and defense lawyer, I've never seen the government go after the victim of a crime before, and that's what they are doing," Gray said.

The earliest record of Sabby's bookmaking activities dates to December 1973, when he was indicted on illegal-gambling and conspiracy charges. He pleaded guilty to the gambling charge, paid a $2,500 fine and was placed on probation for two years.

History of bookmaking

Sabby caught the attention of law-enforcement agents in 1993 when they were investigating allegations of illegal gambling at the Depot Bar in downtown St. Paul.

Agents searched the bar in April 1993 and took from Sabby about $2,000 in cash, and betting papers. He was convicted of sports bookmaking in Ramsey County District Court and paid a $5,000 fine.

Sabby became a major target of gambling agents in 1998 after his arrest by St. Paul police, based on information given authorities by two informants.

On Jan. 9, 1998, he was arrested on St. Paul's East Side for driving with no headlights. Police found football tipboards in his possession, including one with numbers for the Super Bowl. Police reports indicated that Sabby was so drunk that he couldn't recite the alphabet. Yet he was carrying $7,963 in currency, $7,400 of that in $100 bills.

By mutual agreement, authorities kept $5,000 of the gambling proceeds but dropped bookmaking charges against him. He was convicted of an enhanced misdemeanor for drunken driving and was sentenced to 90 days in jail.

Documents in the case showed he had two prior drunken-driving convictions.

In February 1998, gambling agents who searched the home of a woman allegedly working for Sabby found his telephone number and betting papers. Authorities said the betting papers showed that the gambling operation took in 16,913 bets totaling more than $5.6 million between October 1997 and March 1998.

In April 1998, David Petri, hoping to reduce a DWI sentence, offered to give gambling agents information about what he called a large bookmaking operation run by Sabby.

A confidential informant began providing more information about Sabby's alleged gambling operations to authorities in March 2001, including a number for Sabby's cell phone. Authorities got a court order to intercept calls to and from it beginning Dec. 30, 2001. A month later, authorities searched the homes of Sabby, his alleged associates and several St. Paul area bars.

hansen bros. - I just wonder how many tax $$$$$$ dollars were spent on this case.

This case will be in the courts for years IMO.

No kidding vikings2. Not only the tax money wasted, but think of the tax money lost by not legalizing and allowing this bookie to operate legally and pay taxes on his take.

FunkSoulBrother - Yup, it's a system that is truly broken.

3/4 of these states that are in debt in billons, all want to build casinos or add lottery games.

Minnesota Republicans want a casino at Canterbury Park.

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Minnesota Republicans want a casino at Canterbury Park<HR></BLOCKQUOTE>

Actually, that wouldn't be a bad idea, considering those terrible table games they have at the Card Club. It was a good place to play poker, but those table games were a joke!

V2, fsb

i concur, not only the WASTED tax dollars, but this misappropriation of tax dollars -- while they are endeavorously building a case against sabby scores of crack dealers are adding new addicts to their lists of clientele. which spawns more crime to support their habitual urges.

it's very sad. i wish you guys had the opportunity to know this man -- he is a true gentleman.

Funk - You aint a kidding about those table games.

They've been talking about this casino plan at the track for years.

Btw I used to work at Valley Fair...

Have you worked at Valley Fair say in the last 3 years? I have two friends from High School who have been working there every summer the last few years.

hansen bros. - Those crime ridden crack dealers apparently are low priority.

Funk - Not in the last 3 yrs.

Valley Fair is great place to take a chick on a Thursday before a night at the track.

Longtime St. Paul-area bookie Douglas A. Sabby was sentenced to 2½ years in federal prison Thursday for his role as the linchpin in an illegal sports gambling operation that extended into several local bars.

"I don't think I know anybody who hasn't gambled, but you got caught and kept on going," Chief U.S. District Judge James Rosenbaum told Sabby. "There are a whole lot of nice people whose lives have become somewhat of a disaster and that's tragic."

Sabby, 58, was at the center of a three-year federal and state investigation that led to a dozen federal convictions and one acquittal. At times, authorities said, he handled $1 million a month in wagers.

Sabby, who lives in Vadnais Heights, pleaded guilty to nine felonies, including operating an illegal gambling business, money laundering and failure to pay or collect wagering taxes. He was ordered to surrender to authorities by June 10 and will likely serve his time at the federal prison in Duluth. In addition to his prison time, Sabby agreed to forfeit $203,000 that had been seized, and pay $80,000 instead of forfeiting his home.

Sabby testified at the trial of Walter G. Awada, who was convicted of six money-laundering counts for cashing checks for Sabby at Awada's on Plato, a restaurant on St. Paul's West Side. He also testified at the trial of Erick's Bar owner Gary A. Erickson, whom jurors acquitted last November.

Sabby's attorney, Joe Friedberg, took umbrage at a statement Rosenbaum made at the sentencing hearing in Minneapolis, where the judge said, "The biggest rat gets the biggest prize." Friedberg pointed out that Sabby received no break in his sentence for testifying and his "unsatisfactory testimony" irked prosecutors and led to Erickson's acquittal. "So that term [rat] is completely misleading," Friedberg said.

"He [Sabby] ruined a lot of lives," said Bill Koch, the assistant U.S. attorney who prosecuted Sabby and others. "Doug Sabby lived the gambling lifestyle, but he preyed on the friendships of others."

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