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Chula Vista's cleanup act

“I wonder if city politicians got contributions from the card club?

Not business-as-usual nowadays at Seven Mile Casino
Not business-as-usual nowadays at Seven Mile Casino

EyeCandy, a nude dancing establishment, opened in Chula Vista in October 2012. Seven Mile Casino, a gambling establishment, opened on the same street as EyeCandy in August 2015. EyeCandy is gone for good, and Seven Mile Casino faces legal challenges and continued FBI scrutiny.

On December 9, the FBI raided Seven Mile Casino for the second time in two years. The Palomar Club in San Diego was also raided. As the Union-Tribune reported, the raids resulted in 25 indictments with a smorgasbord of charges, including money-laundering, prostitution, illegal bookmaking, illegal poker, and blackjack business. Harvey Souza, the owner of Seven Mile Casino, was charged with “failure to maintain an anti-money-laundering program.”

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Souza will have his day in court and Seven Mile Casino’s license will go before the California Gambling Control Commission, but for now the establishment will open under strict provisions, including “engaging a manager approved by the bureau of Gambling Control.” The manager will provide the bureau with weekly statements of Seven Mile deposits, profits, losses, withdrawals from players’ accounts, and so on.

A statement released by Seven Mile Casino says: “As a family and as a business, they are very much invested in the community of Chula Vista and the industry. We look forward to working with the California Bureau of Gambling Control to resolve all issues.”

Chula Vista unsweetened

Chula Vista filed suit against EyeCandy in 2013, maintaining, among other things, that EyeCandy was located in a mixed use/residential zone. In August, superior-court judge Richard Strauss ordered EyeCandy owners, Jake and Waldon R. Welty, to close. Roger Diamond, attorney for the Weltys, filed an appeal and felt confident he would prevail in appellate court. But in a December 10 interview, Diamond said his clients came to a settlement with the City of Chula Vista and withdrew their appeal.

Diamond said the case hinged, in part, on whether EyeCandy was judged to be located on E Street or on Bay Boulevard. His clients purchased the property, a former Anthony’s restaurant, on 215 Bay Boulevard, which complied with the necessary zoning. Ultimately, the judge ruled that EyeCandy was also on E Street and therefore within 500 feet of the E Street trolley stop, which is zoned mixed/residential.

“The property only failed by 25 feet,” said Diamond. “We literally could have amputated part of the property. I even said to the city we’ll save the taxpayers a lot of money, we’ll stipulate that if the city ever wants to build a residence on the trolley-stop property, we’ll leave. They didn’t want that, they preferred to spend a million dollars in fees to fight the case.”

Diamond conceded, “The judge ruled against us.” But, Diamond said his clients won on attorney fees. “The judge ruled against the city and ruled the city was entitled to nothing. The city was confident they were going to get over a half a million dollars [in legal fees]. They claimed in the court they were only seeking a portion of the fees incurred. We’re going to split out-of-pocket fees for things like court recording, which came to about $55,000."

An October public-record request yielded this response: “To date the City of Chula Vista Attorney’s Office has reviewed, approved and paid $380,425.97 in litigation costs in the matter of City of Chula Vista v Bay & E (EyeCandy). Please be advised that there are pending invoices….”

Diamond continued: “Now the city is free of the strip club, but it’s out an awful lot of money and the property sits empty. Vacant property is never good. You’re better off with some presence like security guards, employees, and clients. If the city were smart they would allow a club to be reinstated. “

Diamond compared Seven Mile Casino to EyeCandy:

“My clients got to operate for a couple of years. There was no alcohol in the strip club, so we didn’t have problems with intoxication. There was zero evidence of prostitution. We had undercover agents all the time. There was one altercation in three years.

“It’s all very amusing to me. Strip club dancing, erotic burlesque-type dancing, traditionally is an American art form. According to the courts, it is presumptively protected by the First Amendment, whereas neither gambling nor marijuana are protected. So between gambling and a strip club, I would think that the strip club would be less of a problem for the city than gambling, but the city seemed to brag about their gambling facility.

“I wonder if city politicians got contributions from the card club? Mr. Welty [the owner] didn’t engage in bribery.”

Souza, the owner of Seven Mile Casino, is known for his generosity to local politicians.

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Not business-as-usual nowadays at Seven Mile Casino
Not business-as-usual nowadays at Seven Mile Casino

EyeCandy, a nude dancing establishment, opened in Chula Vista in October 2012. Seven Mile Casino, a gambling establishment, opened on the same street as EyeCandy in August 2015. EyeCandy is gone for good, and Seven Mile Casino faces legal challenges and continued FBI scrutiny.

On December 9, the FBI raided Seven Mile Casino for the second time in two years. The Palomar Club in San Diego was also raided. As the Union-Tribune reported, the raids resulted in 25 indictments with a smorgasbord of charges, including money-laundering, prostitution, illegal bookmaking, illegal poker, and blackjack business. Harvey Souza, the owner of Seven Mile Casino, was charged with “failure to maintain an anti-money-laundering program.”

Sponsored
Sponsored

Souza will have his day in court and Seven Mile Casino’s license will go before the California Gambling Control Commission, but for now the establishment will open under strict provisions, including “engaging a manager approved by the bureau of Gambling Control.” The manager will provide the bureau with weekly statements of Seven Mile deposits, profits, losses, withdrawals from players’ accounts, and so on.

A statement released by Seven Mile Casino says: “As a family and as a business, they are very much invested in the community of Chula Vista and the industry. We look forward to working with the California Bureau of Gambling Control to resolve all issues.”

Chula Vista unsweetened

Chula Vista filed suit against EyeCandy in 2013, maintaining, among other things, that EyeCandy was located in a mixed use/residential zone. In August, superior-court judge Richard Strauss ordered EyeCandy owners, Jake and Waldon R. Welty, to close. Roger Diamond, attorney for the Weltys, filed an appeal and felt confident he would prevail in appellate court. But in a December 10 interview, Diamond said his clients came to a settlement with the City of Chula Vista and withdrew their appeal.

Diamond said the case hinged, in part, on whether EyeCandy was judged to be located on E Street or on Bay Boulevard. His clients purchased the property, a former Anthony’s restaurant, on 215 Bay Boulevard, which complied with the necessary zoning. Ultimately, the judge ruled that EyeCandy was also on E Street and therefore within 500 feet of the E Street trolley stop, which is zoned mixed/residential.

“The property only failed by 25 feet,” said Diamond. “We literally could have amputated part of the property. I even said to the city we’ll save the taxpayers a lot of money, we’ll stipulate that if the city ever wants to build a residence on the trolley-stop property, we’ll leave. They didn’t want that, they preferred to spend a million dollars in fees to fight the case.”

Diamond conceded, “The judge ruled against us.” But, Diamond said his clients won on attorney fees. “The judge ruled against the city and ruled the city was entitled to nothing. The city was confident they were going to get over a half a million dollars [in legal fees]. They claimed in the court they were only seeking a portion of the fees incurred. We’re going to split out-of-pocket fees for things like court recording, which came to about $55,000."

An October public-record request yielded this response: “To date the City of Chula Vista Attorney’s Office has reviewed, approved and paid $380,425.97 in litigation costs in the matter of City of Chula Vista v Bay & E (EyeCandy). Please be advised that there are pending invoices….”

Diamond continued: “Now the city is free of the strip club, but it’s out an awful lot of money and the property sits empty. Vacant property is never good. You’re better off with some presence like security guards, employees, and clients. If the city were smart they would allow a club to be reinstated. “

Diamond compared Seven Mile Casino to EyeCandy:

“My clients got to operate for a couple of years. There was no alcohol in the strip club, so we didn’t have problems with intoxication. There was zero evidence of prostitution. We had undercover agents all the time. There was one altercation in three years.

“It’s all very amusing to me. Strip club dancing, erotic burlesque-type dancing, traditionally is an American art form. According to the courts, it is presumptively protected by the First Amendment, whereas neither gambling nor marijuana are protected. So between gambling and a strip club, I would think that the strip club would be less of a problem for the city than gambling, but the city seemed to brag about their gambling facility.

“I wonder if city politicians got contributions from the card club? Mr. Welty [the owner] didn’t engage in bribery.”

Souza, the owner of Seven Mile Casino, is known for his generosity to local politicians.

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Dec. 14, 2015
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