Controversy is threatening the only Eastern Massachusetts casino proposal to receive clear voter approval, as a federal grand jury and two state agencies investigate whether a businessman with an extensive criminal record has a hidden ownership in the Everett property where Steve Wynn wants to build a $1.3 billion gaming resort, according to people with direct knowledge of the investigations.
In response, officials at Wynn Resorts are rewriting the sales agreement for the former industrial land, slashing the price the company will pay if the casino is built to minimize the possibility that any undisclosed partners could benefit from a gambling business.
Federal prosecutors, as well as the state gambling commission and the attorney general, want to know whether Charles A. Lightbody, who served jail time for assault with a dangerous weapon and pleaded guilty for his role in a massive identity theft ring in New York, is a secret investor who could profit if the casino is approved, according to the people familiar with the inquiry.
The scope of the grand jury’s investigation is unclear, but prosecutors have called several witnesses to testify about the land deal. Meanwhile, FBI agents have questioned an associate of Lightbody who also has a criminal record and was a co-owner of the property.
Lightbody acknowledged to the Globe through his attorney that he was initially part of the group that owned the 30-acre parcel, but his attorney insists he withdrew before Wynn negotiated the option to buy the property in late 2012. However, several people interviewed by the Globe say that Lightbody has boasted he will make a fortune if the casino is built.
Wynn officials say they never dealt with Lightbody, and that they performed background investigations on the legal property owners. But investigators for the Massachusetts Gaming Commission who reviewed the land option “raised concerns about potential participants who had not been disclosed to us,” Wynn Resorts confirmed in a statement to the Globe.
Wynn had offered to pay about $70 million for land that a company called FBT Everett Realty LLC bought in 2009 for little more than $8 million, according to people familiar with the deal. Wynn officials would not disclose the new price, but said it would be the amount the sellers could expect to get if the land wasn’t about to become a lucrative casino. The partners of FBT Realty, Dustin DeNunzio, Paul Lohnes and Anthony Gattineri, would have no ongoing stake in the casino either, under the agreement.
“We have agreed with the sellers to amend our option agreement to clearly confirm ownership and to reduce the option price to reflect fair market value without casino use,” read the Wynn statement.
Wynn Resort officials say they are unaware of the federal or attorney general investigations into the land deal, though they acknowledge that gambling commission investigators have been asking questions about the property. They also stressed that the commission found no fault with Wynn’s conduct in negotiating the option to buy the property.
Officials at the gambling commission, whom Wynn officials have consulted about the revised land sale, declined to comment.
Wynn has good reason to make certain there’s no hint of criminal involvement in his project, the only clearly viable gaming proposal in one of the biggest untapped gambling markets in the United States. Any taint could result in his project being rejected.
Wynn’s Everett proposal is the only project in the eastern part of the state that has been fully approved by voters. Voters in Milford and East Boston have rejected rival proposals, though developers of the casino proposed for East Boston, at Suffolk Downs racetrack, hope to press on by relocating to neighboring Revere where voters supported the casino.
But Wynn is still waiting to hear whether he passed a state background check, a process that proved damaging to Suffolk Downs.
In October, Suffolk Downs dropped Caesars from the $1 billion casino proposal just before the release of a state background check that raised several concerns, including a licensing deal the company signed with a firm owned in part by a businessman allegedly tied to Russian mobsters. The revelation helped turn the tide against the project in East Boston.
“The (Massachusetts) Gaming Commission looks to New Jersey as its model — that is the strictest regulatory authority in the country,” said Clyde Barrow, a gambling expert at University of Massachusetts Dartmouth. “In New Jersey, if your attorney is seen having lunch with a mobster, you’re in trouble.”
Ironically, Lightbody is best known recently for fighting against a casino project, spending thousands to encourage a no vote on the East Boston proposal; he was also charged with punching a casino supporter.
Lightbody’s attorney Timothy Flaherty said Lightbody joined with several other investors to purchase the former Monsanto Chemical Co. land in Everett back in 2009 before Wynn proposed a casino for the site. Lightbody’s name was never in the official records, a common practice in Massachusetts, but Flaherty said he was part of the group that planned to bring commercial development to the land.
However, Lightbody transferred his interest in the land before Wynn signed an option to buy it in December 2012, Flaherty said, though he wouldn’t say exactly when the transfer took place.
He called Lightbody “a respected member of the business community who is known throughout Revere for his charitable good works.” Lightbody is also a major property owner north of Boston and he contributed at least $1,500 to Everett Mayor Carlo DeMaria’s campaigns.
But Lightbody also has an extensive rap sheet, including two convictions for assault with a deadly weapon and a 2004 arrest at a Connecticut casino for causing a disturbance. He was charged with criminal mischief, and breach of the peace and ordered to “stay out of casinos.”
Two years later, Lightbody was named in a 39-count indictment in New York that accused nine men of stealing people’s identities by posing as employees of the Department of Homeland Security. Using the personal information they collected from unsuspecting people they telephoned, they bought goods worth more than $1 million, authorities said.
When police arrested Lightbody at his 6,000-square-foot Revere home, the house was so full of allegedly stolen merchandise — including plasma TVs, designer handbags, cameras, and jewelry — they had to rent a tractor-trailer to haul the loot away, according to news coverage at the time. Lightbody eventually pleaded guilty, though he claimed much of the merchandise taken from his home was not stolen. He was ordered to pay $16,000 in fines and sentenced to three years’ probation.
Law enforcement officials investigating the case said that Lightbody was particularly dangerous, writing in their application for a search warrant that they should be allowed to enter without knocking first because Lightbody had “numerous charges . . . of a violent nature.”
Despite Lightbody’s claim that he had no stake in the Everett casino plan, several people, including a state investigator and an Everett businessman, say he has boasted that he stands to make millions if the state approves Wynn’s casino license and he buys the land. However, they could not confirm whether Lightbody made the remarks before or after the option to buy the land was formally signed.
“I hear it from everybody because he’s a big mouth and tells everybody,” said the businessman, who asked to remain nameless for fear of retaliation. “He’s telling everybody that $18 million — that’s his share.”
Gary P. DeCicco, a business associate of Lightbody who was once convicted of mail fraud, was part of the group that attracted Lightbody to invest in the Everett property, in hopes of attracting Home Depot and Walmart to develop the site, according to DeCicco’s attorney, Joseph Oteri.
The FBI agents “talked to him about a whole bunch of stuff involving the Everett land and the deal,” said Oteri, adding that the state gambling commission also subpoenaed his client several months ago, but when he showed up, they didn’t question him.
“He has no hidden ownership in it,” said Oteri, who said DeCicco pulled out 18 months ago when the original commercial development plan collapsed. “As far as he knows Lightbody got out, too. He knows of no role Lightbody had, except as an investor.”
Oteri defended his client’s reputation.
“He’s an entrepreneur,” Oteri said. “He’s a kid who starts with nothing, built up a moving business, made a considerable amount of money and started developing. . . . He’s a real go-getter. The guy works prodigious hours.”
Boston attorney Thomas J. Butters, who represents FBT Everett Realty, Lohnes and DeNunzio, said his clients are “experienced and highly thought of local businessmen.” Butters declined to comment on the new, reduced price agreement, but said he still supports the casino. “We are hopeful that the Gaming Commission will approve the license,” he said.
Asked about the inquiry, a spokeswoman for the US attorney’s office, Christina DiIorio-Sterling, said, “We do not confirm or deny grand jury investigations.”
Despite the controversy, Mayor DeMaria said he remains confident the Everett casino will be approved.
“I’m committed to the project and issues regarding Charlie’s somewhat ownership of the property are going to be resolved,” he said.Andrea Estes can be reached at email@example.com. Shelley Murphy can be reached at firstname.lastname@example.org. Mark Arsenault can be reached at email@example.com. Michael Rezendes and Frank Phillips of the Globe staff contributed to this report.