Detention rules tightened on high-roller charged in Ponzi scheme

A federal judge Tuesday tightened home detention restrictions on a high-rolling, international businessman charged with running an "elaborate" Ponzi scheme after authorities alleged they caught him playing video poker at casinos more than two-dozen times.

After a 90-minute hearing, U.S. Magistrate Judge Peggy Leen ordered Ramon DeSage to stop gambling and stay out of casinos as part of his electronically monitored home detention while he fights federal wire fraud charges.

DeSage, who supplied luxury gifts and amenities to Strip casinos for more than 30 years, was arrested by Internal Revenue Service agents in late June and charged with defrauding investors out of tens of millions of dollars.

In a criminal complaint, authorities said DeSage also was a "prodigious gambler" who, according to Nevada gaming regulators, has lost more than $20 million on the Strip since 2006.

DeSage, who holds dual citizenship in the United States and Lebanon, insisted in court Tuesday that he does not have a gambling problem.

"I am not a degenerate gambler," he said, adding that he has been regarded as a high roller on the Strip since 1977. "I love this country."

Leen had banned DeSage from casinos during his initial appearance on the fraud charges June 29, but her instructions took weeks to filter to federal pretrial services officers, who ended up giving DeSage permission to visit some gambling establishments.

"This entire mess could have, and should have, been avoided," an angry Leen told the government and a battery of high-priced lawyers who showed up in DeSage's defense.

The magistrate described the situation as a "failure of communication all the way around" and told the pretrial services officers that she didn't want to see a "wide-open" supervision for DeSage in the future.

One officer acknowledged that he had failed to ensure that DeSage refrained from gambling, and DeSage's lead defense lawyer, Richard Wright, argued that DeSage didn't deliberately disobey Leen's order.

In seeking tougher home detention restrictions, Assistant U.S. Attorney Gregory Damm played a 10-minute summary in court of seven hours of casino surveillance tapes that showed DeSage playing video poker at the South Point resort between Aug. 27 and Sept. 8.

In all, Damm said, records of DeSage's electronic monitoring revealed that he made 26 visits to casinos between June 29 and Sept. 9.

IRS agents arrested DeSage in June amid word that he was about to flee to Lebanon, where he is referred to as a "sheik."

Damm said at the time that DeSage owns a 40,000-square-foot palace in Lebanon and more than $10 million in real estate holdings there.

DeSage used his chief Las Vegas company, Cadeau Express, and other companies to carry out the Ponzi scheme, the criminal complaint against him alleges.

He owes investors more than $75 million, according to the complaint.

The embattled businessman used money in the scheme to repay earlier investors, maintain his wealthy lifestyle and cover millions of dollars in gambling losses at casinos along the Strip, some of which he supplies with high-end customer goods, the complaint alleges.

DeSage has denied the fraud allegations and trying to flee the country last summer.

Last month, federal authorities charged Tara Mazzeo, 36, a DeSage friend and employee, with lying to IRS agents when they interviewed her in July 2011 about her financial ties to DeSage.

According to the indictment, Mazzeo lied about receiving $497,000 from DeSage to help her buy a home and a luxury vehicle.

She also lied about the transfer of $350,000 from DeSage's bank accounts to the business account of Mazzeo's Tarabella LLC, the indictment alleges.

Mazzeo, who is free on her own recognizance, faces three felony counts of making false statements to IRS agents.

Contact reporter Jeff German at jgerman@reviewjournal.com or 702-380-8135.