Sunday, February 22, 2004
Copyright © Las Vegas Review-Journal

JOHN L. SMITH: Trouble at Castaways obvious to employees left in limbo by closure

Pamela Calhoun admits she's no financial genius, but she knew the bottom line.

After nearly 14 years working in the casino cage at the Castaways, she spotted trouble for months before its abrupt closure on Jan. 29.

Calhoun and other former employees I've interviewed wonder why it took so much longer for state and federal officials, people with the power to supervise the faltering gambling hall, to step in. She believes swifter action might have prevented a lot of misery for hundreds of dumped workers.

Castaways President Michael Villamor failed to keep the venerable casino formerly known as the Showboat afloat, steering it into Chapter 11 bankruptcy protection in June 2003 while claiming up to $100 million in total debts.

But its closure hurt Calhoun and most of the property's 830 wage-earners like her on many levels. Pay for the 62-year-old Calhoun topped out at $99.44 per day. As a nonunion employee, she hadn't received a raise in six years.

As if losing their jobs wasn't traumatic enough, former employees now contend Castaways management failed to make payments to the company 401(k) retirement account, Social Security and health insurance plan. All three fall under the purview of supposed federal watchdogs.

Where, she asks, were those regulatory hounds when they were needed?

"They had to have known what was going on," she said. "They had to have seen it. It was no secret."

The awful result: The IRS now has frozen workers' 401(k) accounts, money many were counting on using to survive between jobs. Social Security contributions were unpaid by management, and as a result, dozens of W-2 forms are inaccurate with tax season approaching. Health insurance is beyond the reach of many nonunion workers, some of whom have not yet received their final paychecks.

Culinary sources report that Castaways checks to the union's health and welfare and pension fund bounced. Then there's the question of whether former employees ever will receive compensation for the thousands of hours of vacation time they're owed.

In short, they've been screwed. And no one in authority stepped in to help.

Calhoun and another veteran cage employee agreed they noticed almost no monitoring from authorities, despite the fact it was well-known the Castaways was having cash-flow problems so severe that many slot machines were empty.

Near the end, workers' paychecks bounced and had to be cashed in-house in order to cut down on mounting bank fees.

And still no gaming regulator or tax agent emerged to monitor the sinking operation.

Gaming Control Board Chief of Enforcement Keith Copher said the state did its part by informing Labor Department officials of ongoing complaints at the Castaways. Although Copher said the issues "definitely will have an impact on (management) returning for licensing," he admitted his frustration with the slow-moving process.

Calhoun is more blunt. She believes Villamor is directly responsible for the ruin of the Castaways. She laughed bitterly and said, "It's not funny, but it's so disgusting. It's outrageous what this man did."

Who can blame her?

She is uninsured, out of work, and now survives on $282 a week in unemployment benefits while she scrambles to find a job. The cheapest health plan she has found costs $250 a month.

"At this point, I'm just hoping to get my final paycheck," Calhoun said. "That's what I'm hoping."

It shouldn't be too much to ask, but there are no guarantees. In a letter dated Feb. 5, Villamor thanked his employees for their efforts and apologized for the company's failure. He blamed lender Vestin Mortgage for the closure that came from "out of nowhere."

Then it was his turn to deliver the bottom line.

"I don't know for certain how long it will be before your paychecks arrive ..." Villamor said. "I know how hard it must be on everyone, but we were left with nothing. ... I am very concerned and agonize deeply for the welfare of you and your families. I am truly sorry this has happened."

Pamela Calhoun has a message for the boss:

Sorry doesn't pay the light bill.

John L. Smith's column appears Tuesday, Wednesday, Friday and Sunday. E-mail him at Smith@reviewjournal.com or call 383-0295.