Records suggest state is so far losing its casino fight with Sanborn

The state suspended former state Sen. Andy Sanborn's gaming license and ordered him to sell his Concord Casino to a buyer approved by the New Hampshire Lottery Commission after finding he and his wife, Rep. Laurie Sanborn, had misrepresented the nature of the casino's business when applying for a pandemic loan and misspending the money on a Ferrari and two Porsche race cars. (Annmarie Timmins | New Hampshire Bulletin)

Newly obtained legal documents in the attorney general’s year-old pandemic fraud case against casino owner Andy Sanborn reveal for the first time what the parties have declined to say publicly for months.

The documents, obtained by the Bulletin via a right-to-know request, show that both legal teams distrust the other. Sanborn believes the state agency requiring him to sell his casino is also intentionally scaring away buyers. And Sanborn’s legal team has continued to outmaneuver the Attorney General’s Office.

Sanborn’s most recent victory came Wednesday.

Over vehement objections and skepticism from the Attorney General’s Office, Sanborn’s lawyers secured their client three more months to sell his casino after convincing a state administrative law judge that a deal is pending. His June deadline is now Sept. 30.

That buyer, who isn’t named in the order obtained by the Bulletin , has said they intend to use Sanborn’s existing Concord Casino on Main Street temporarily while developing a permanent location elsewhere in the city.

If Sanborn can sell by Sept. 30, his casino retains access to its greatest asset: one of the state’s limited and coveted historic horse racing licenses. If he doesn’t, that license is revoked for two years, rendering the casino effectively worthless because historic horse racing is where casinos in New Hampshire make their money.

In granting the extension, the administrative law judge on the case, Gregory Albert, rejected the attorney general’s main argument: that Sanborn claimed a deal was pending when it wasn’t to defer “punishment.”

Not-so-public information

The Bulletin’s right-to-know request to the New Hampshire Lottery Commission produced more than 300 pages of documents. They show, among other things, that the state has made public information in this case harder to get since laying out its fraud allegations against Sanborn 11 months ago.

The documents included transcripts of two hearings held in June that were open to the public but virtually impossible to attend because Lottery stopped publishing hearing notices on its website.

AG: Former state senator used pandemic aid to enrich himself, buy wife a Ferrari

When asked why it ceased doing so, a Lottery official told the Bulletin the office had been advised by state officials that the right-to-know law does not require them to publish hearing dates. The law doesn’t prohibit it either.

After the Bulletin filed a motion Wednesday afternoon to get notice of future hearings, the Attorney General’s Office told a reporter it was unaware she’d been denied access to that information and would not object to her request. The office then filed its own motion asking that the Lottery be required to resume posting hearing notices.

There are other indications, too.

During a June 26 hearing in the licensing case, Zachary Hafer, one of Sanborn’s attorneys, asked the Attorney General’s Office to be more forthcoming in updates given how public the office was in laying its fraud allegations against Sanborn.

Specifically, Hafer wanted the office to tell the media in June that Sanborn had been given a preliminary three-week extension . At that point, the state declined to disclose that Sanborn had requested the extension.

Assistant Attorney General Mark Dell’Orfano, who records show voiced objections to that extension but failed to file a written objection, pushed back.

“So, you know, I don’t – we’re not looking to make any press around this either today or three months from now,” Dell’Orfano said, according to the transcript. “If the press decides to run something, if they decide to ask us for comment, that doesn’t mean we’re going to comment on it.”

Michael Garrity, spokesperson for the Attorney General’s Office, declined to comment Wednesday and referred the Bulletin to the documents.

Here’s what else the documents do – and don’t – tell us.

The records reveal nothing about the state’s criminal fraud investigation into Sanborn, his wife, Rep. Laurie Sanborn, and his gaming company Win Win Win.

Nearly a year ago, John Formella alleged the Sanborns had misled federal officials to obtain nearly $844,000 in pandemic aid for Win Win Win and then spent the money on three race cars and other personal expenses.

The state has not brought charges but Formella cited those allegations in August as grounds to revoke Sanborn’s gaming license indefinitely , an outcome Sanborn desperately wants to avoid.

The records also do not indicate whether New Hampshire’s U.S. Attorney’s Office is investigating the Sanborns or Win Win Win. Formella said in August he had referred the case there, but a spokesperson in that office declined to comment.

Sanborn has denied the allegations.

And for now, as his attorneys await news on the criminal case, they have successfully preserved his gaming license through litigation. They sued the Lottery Commission; managed to shift Sanborn’s burden of proof to the state; struck a deal to sell the casino rather than de-license it; and got two extensions to close that deal.

State’s ‘extraordinarily rare’ approach

Sanborn, a former state senator, alleges the Attorney General’s Office is taking steps to imperil that sale.

Hafer and his legal partner Adam Katz, of the Boston-based Cooley law firm, say Formella had dual intentions in telling the public in August that the Sanborns and Win Win Win were under investigation. In a June 26 hearing, Hafer called Formella’s announcement – absent criminal charges – “extraordinarily rare” and “unfair.”

If Sanborn’s company is convicted of state or federal crimes, Lottery rules prohibit it from holding a gaming license for five to 10 years, depending on whether it’s a misdemeanor- or felony-level conviction.

That risk is so significant, casino experts told the Bulletin in February, that Sanborn would have had a bidding war on his hands if not for the possibility of a criminal conviction.

Sanborn’s lawyers have alleged that Formella’s announcement was intended to stoke those fears and “scare off” buyers.

“No buyer is going to be interested in (buying) if they think that the state (attorney general) is waiting around the corner with an indictment,” Katz said during a June 26 hearing.

In fact, in a filing Monday, the Attorney General’s Office noted that at least one potential buyer did cite the criminal case as one reason for backing away.

Hafer reiterated that in an email Friday.

“It is settled practice for prosecutors to decline to comment on ongoing criminal investigations.  That practice protects the subjects of investigations from suffering reputational or other harms based on allegations that may well turn out to be unsupported by any evidence,” Hafer wrote. “Attorney General Formella’s decision to issue a press release 11 months ago publicly announcing a newly opened criminal investigation – that is, before that investigation even started – was highly unusual. Particularly given the reference in the press release to matters of federal law outside the state’s expertise and jurisdiction.”

Katz and Hafer have asked the Attorney General’s Office for written assurance that a new buyer would not be penalized if Win Win Win is convicted under another owner’s watch.

“… We don’t think it’s a big ask,” Hafer said. “We’re not asking for any consideration whatsoever with respect to Mr. Sanborn or even Win Win Win prior to any acquisition.”

At that hearing, Albert, the administrative law judge, indicated he agreed.

“I would, I think, initially agree with Attorney Hafer’s position,” Albert said. “It would seem like a fundamental violation of due process to penalize the successor (buyer) for the predecessor’s alleged acts.”

Dell’Orfano, of the Attorney Generals’ Office, indicated he understood Sanborn’s concern and request but could not provide written reassurance because he is not privy to the office’s criminal investigation.

The Attorney General’s Office declined to comment Wednesday on allegations they are covertly typing to imperil a sale and referred the Bulletin to the documents.

In one filing, the office said it refuted allegations it was acting in bad faith.

“The overwhelming evidence is to the contrary,” it said. “The (Lottery) and Department of Justice have acted in all ways to resolve the extraordinary relief requested by (Sanborn) – and (he) simply ignores this evidence and weaves a narrative that is not supported in fact.”

Hafer said Friday that the Attorney General’s Office had not yet responded to their request.

New buyer ‘prepared to move quickly’

Sanborn’s attorneys have declined to answer the Bulletin’s questions about potential buyers. According to documents filed Monday by the Attorney General’s Office, Sanborn claimed to have “over fifty suitors.”

The state has consistently questioned whether any of them were negotiating a sale with Sanborn.

On Monday, Senior Assistant Attorney General Jessica King wrote in a filing that Sanborn “has not produced current tangible evidence of activities establishing that its sale is pending or that, if granted a three-month extension, a sale would close before the expiration of the three-month extension period.”

Two days later, Albert, the hearing officer, issued an order saying he had seen the evidence of a pending sale he needed to give Sanborn more time. The terms of that pending sale are filed under seal. But Albert provided some information in his order.

The buyer, whom Lottery officials met in June, has a “non-binding proposal to purchase (Win Win Win) which (Win Win Win) has verbally accepted, as represented by (Sanborn’s lawyers),” Albert wrote.

The buyer, who appears to operate casinos in other states, would self-finance the purchase, Albert wrote. His order did not reveal the sale price or give a timeline for a sale.

“The potential buyer,” according to Albert’s order, “explained they are ‘prepared to move quickly (five business days or less)’ on a markup of the purchase agreement once (they) are selected as the purchaser on an exclusive basis.”

A buyer would still need to clear a “suitability” review by the state, which includes an in-depth look at finances and business operations as well as a criminal background check.

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