Wynn Resorts, which is seeking to convince state regulators it deserves to retain its casino license, has removed a security executive following his admission of conducting surveillance on employees.
In a legal brief sent Monday to the Massachusetts Gaming Commission, the company indicated that chief executive Matthew Maddox on Saturday had informed James Stern, who had worked as Wynn’s executive vice president of corporate security and investigations, that the company “would no longer require his services.”
During the hearings last week, Stern told the commission he had monitored Elaine Wynn, a company founder, and three employees, in years past.
In its brief, Wynn Resorts said that Stern had orchestrated the undercover surveillance operation and that Maddox was unaware of it.
“Mr. Stern testified that Mr. Maddox was not advised of and Mr. Maddox testified that he did not have any knowledge regarding Mr. Stern’s surveillance operation involving Ms. Wynn and three company employees suspected of misusing corporate records,” the brief stated.
Stern’s surveillance of Elaine Wynn, the ex-wife of Steve Wynn, took place years ago in connection with separate litigation, the brief stated.
In early 2018, The Wall Street Journal published a story detailing sexual misconduct allegations against casino mogul Steve Wynn, the company’s founder. Steve Wynn has denied the allegations.
In its brief, the company acknowledged that Stern had approved surveillance of a source of that story, former Wynn casino employee Jorgen Nielsen. Stern briefly consulted Maddox about the operation, the company said in its memo. The legal brief indicated that “no surveillance was undertaken on any alleged victims.”
Stern’s departure comes as the company seeks to demonstrate that it remains fit to hold a casino license, which it needs to open its $2.6 billion resort along the banks of the Mystic River in Everett. Named Encore Boston Harbor, the casino is slated to open in June.
State law requires casino license holders to conduct themselves ethically and gives the commission broad authority to determine which companies qualify.
The gaming commission is deliberating over the license and is expected to issue a written decision in the coming weeks, a spokeswoman said Tuesday.
According to a scathing report presented to the Massachusetts Gaming Commission last week, Wynn Resorts executives, aided by outside lawyers, covered up allegations of sexual harassment and misconduct against Steve Wynn. The report also found that former Wynn executives had failed to properly investigate the allegations.
In its brief, the company defended Maddox, who became CEO last year after Steve Wynn resigned.
“To be clear, there is absolutely no evidence that Mr. Maddox was aware of any of the allegations of sexual misconduct at the time that they were made to other executives,” it stated. “No one has testified (or even suggested) that Mr. Maddox was aware of those allegations — not one email or other piece of evidence exists to show that he was advised of those allegations, and he has twice testified under oath that he was not aware of them. That other executives knew and failed to advise Mr. Maddox is their failure, not his.”
Wynn officials say the company has replaced executives who did not follow up on the complaints and turned over most of its board.
Last week, Karen Wells, who directs the commission’s investigations and enforcement bureau, which produced the report, said that while the company’s positive changes are important, “remedial measures . . . do not erase the past.”
The state’s investigative report found that in 2005, a manicurist at the Wynn Las Vegas alleged to management that Steve Wynn had raped her and she had become pregnant. The manicurist reached a $7.5 million settlement with Wynn that was “structured for utmost secrecy” and prohibited her from speaking about the matter, the report found. Several people told investigators that Steve Wynn paid the settlement himself.
Three former Wynn Resorts executives, not including Steve Wynn, became aware of the rape claim, the report says. None of the officials followed company policy and initiated an investigation, and no reports were made to the board of directors.
Earlier this year, Nevada gambling authorities levied a record $20 million fine against Wynn Resorts for mishandling sexual misconduct allegations against Steve Wynn.
Material from the Associated Press was used in this report. Mark Arsenault and Travis Andersen of Globe staff contributed to this report. Danny McDonald can be reached at firstname.lastname@example.org. Follow him on Twitter @Danny__McDonald.