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Untangling a Lobbyist's Stake in a Casino Fleet

With Millions of Dollars Unaccounted for, Another Federal Investigation Targets Abramoff

By Susan Schmidt and James V. Grimaldi
Washington Post Staff Writers
Sunday, May 1, 2005; Page A01

It was a gangland-style hit straight out of "Goodfellas."

A man in a BMW was driving down a quiet side street after an evening meeting at his Fort Lauderdale office when a car slowed to a stop in front of him. A second car boxed the BMW in from behind, then a dark Mustang appeared from the opposite direction. The Mustang's driver pulled alongside and pumped three hollow-point bullets into the BMW driver's chest.

Gus Boulis, left, had a tumultuous partnership with the majority owners of SunCruz Casinos, which he founded. (Joe Rimkus Jr. -- Miami Herald)

The dead man was Konstantinos "Gus" Boulis, a volatile 51-year-old self-made millionaire, a Greek immigrant who had started as a dishwasher in Canada and ended up in Florida, where he built an empire of restaurants, hotels and cruise ships used for offshore casino gambling. Boulis's slaying, still unsolved four years later, reverberated all the way to Washington. Months earlier he had sold his fleet of casino ships to a partnership that included Republican superlobbyist Jack Abramoff.

Abramoff is best known as a target of a federal investigation in Washington into the tens of millions in fees he and a partner collected from casino-owning Indian tribes. But the wreckage from his brief and tumultuous time as owner of the gambling fleet threatens to overtake his Washington legal troubles.

Not long after Abramoff and his partners bought SunCruz Casinos in September 2000, the venture ran aground after a fistfight between two of the owners, allegations of mob influence, dueling lawsuits and, finally, Boulis's death on Feb. 6, 2001. Now, Abramoff is the target of a federal investigation into whether the casino ship deal involved bank fraud. According to court records, the SunCruz purchase hinged on a fake wire transfer for $23 million intended to persuade lenders to provide financing to Abramoff's group.

Although the outlines of the tale have become part of South Florida lore, what has not been disclosed are the full details of the alleged fraud at the heart of the transaction and the extent of Abramoff's role -- including his use of contacts with Republican Reps. Tom DeLay (Tex.) and Robert W. Ney (Ohio) and members of their staffs as he worked to land the deal.

The SunCruz story combines the South Florida of novelist Carl Hiaasen with the Washington of influence-peddling K Street: Thousands of pages of bankruptcy and other court records, along with dozens of interviews in Florida and Washington, reveal secret deals; a forged document; double-crossing partners; and socializing with government officials on a private jet, at the U.S. Open golf tournament at Pebble Beach, at a Monday night football game in a private box at FedEx Field, and at an exclusive party on Inauguration Day in Washington.

Gus Boulis never really wanted to sell SunCruz. He bought his first cruise boat in 1994 and swiftly added 10 more, building an enormously profitable business that took in as much as $30 million in yearly profits.

Boulis, a larger-than-life character, had always been a scrapper and something of a business genius. As a teenager, he jumped ship from a Greek freighter in Canada, where he made his first fortune with Mr. Submarine sandwich shops. After retiring to the Florida Keys, at the age of 30, he built another fortune with the popular Miami Subs chain. Then he launched SunCruz, known as a "cruise to nowhere" casino business. His midsize cruise ships left on day trips from nine ports around Florida, taking tourists, high-rollers and elderly players into international waters, beyond the reach of the state's anti-gambling laws.

Based outside Fort Lauderdale, the business was the bane of Florida officials, who thought Boulis flouted the law, and SunCruz's port city neighbors, who complained that drunken gamblers were urinating on their lawns. For years, Boulis beat back efforts by federal and state lawyers determined to shut him down.

In 1999, federal prosecutors charged Boulis with violating the Shipping Act by purchasing his vessels without being a U.S. citizen. Boulis agreed to pay a $1 million fine and sell his cruise line. The government gave him 36 months to do it and agreed to keep the settlement secret so Boulis would not lose money in a fire sale.

To sell his business, Boulis turned to his lawyers in the D.C. office of Preston Gates Ellis & Rouvelas Meeds LLP. Art Dimopoulos, a maritime lawyer, looked for buyers. Jack Abramoff, one of Dimopoulos's partners at Preston Gates, said he could find one.

Abramoff, 40, was a study in contradictions. A smooth-talking political power player who was an Orthodox Jew, the former high school weightlifter produced movies in Hollywood before becoming one of the top lobbyists in town.

He had built a lucrative practice by showing then-Democrat-dominated K Street and its corporate clients how to make friends in the new Republican Congress. He was especially close to Tom DeLay, then House majority whip. Abramoff had also convinced casino-rich Indian tribes that they should begin switching their copious campaign contributions to the GOP.

The buyer Abramoff found for Boulis was Adam Kidan, a 36-year-old New York City businessman who had owned the Dial-a-Mattress franchise in Washington. Abramoff had known Kidan since the 1980s when Abramoff was at Georgetown Law Center and Kidan was an undergraduate at George Washington University. Both were active in the national office of the College Republicans.

Abramoff and Kidan were already in business with a third partner, former Reagan White House aide Ben Waldman, who also had been a College Republican. The three men had gotten together in a fledgling venture that sought to sell advertising on water taxis that would travel the Potomac River.

Dimopoulos took Kidan to Florida to meet Boulis. What was not disclosed to Preston Gates for at least eight months, according to a statement by the firm on Friday, was that Abramoff then joined Kidan in the SunCruz venture as a 50-50 partner. Such an arrangement would constitute a potential conflict of interest, because partners in the Preston Gates firm would be on both sides of the deal. The Preston Gates statement said that when the firm learned of the situation, it notified Boulis, who was already aware of it and did not object.

Abramoff's plan was to have Kidan put up most of the money and Abramoff "would use his lobbying expertise and network to help expand the new company's markets both in the U.S. and abroad," Abramoff's lawyers later asserted. Abramoff would say later that Kidan told him he was looking to invest an "eight-figure" payoff he had made from the sale of his Dial-a-Mattress franchise.

But even a cursory background check would have raised serious questions about whether Kidan had that kind of money. Kidan's business was in bankruptcy proceedings, and Kidan had declared personal bankruptcy in 1996.

Nonetheless, in January 2000, Boulis agreed in a letter of intent to sell SunCruz for $145 million. A few weeks later, though, Boulis demanded a host of unwelcome additional terms, including a consulting deal.

Suddenly, Boulis was being denounced in Congress.

Michael Scanlon, a former DeLay spokesman Abramoff had just hired at Preston Gates, asked Ohio congressman Bob Ney to insert remarks into the Congressional Record that would put pressure on Boulis.

"Mr. Speaker, how SunCruz Casinos and Gus Boulis conduct themselves with regard to Florida laws is very unnerving," Ney said in the March 30 Congressional Record. "I don't want to see the actions of one bad apple in Florida, or anywhere else . . . affect the business aspect of this industry or hurt any innocent casino patron in our country."

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