Sun Archives
- Mirage employee admitted to lying about cash forms (5-28-2008)
- Columnist Jeff German: Gaming's image is at stake (2-26-2003)
Five years ago, a top casino executive was blamed for not spotting a criminal employee, and sent packing with a severance check.
Gaming industry protocol suggests he should have kept quiet, lain low and let the incident fade with time.
Instead, former Mirage Chief Financial Officer Bob Kocienski fought back.
And on Friday it paid off after a jury awarded him $4.5 million in one of the largest wrongful termination claims in state history.
Kocienski said Tuesday his good name had been restored after having been wrongly made a scapegoat for a crime he did not commit.
“This has been a black cloud over my head for five years,” Kocienski said. “I finally feel vindicated.”
MGM Mirage is appealing the verdict, which company spokesman Alan Feldman says isn’t “supported by the evidence.”
At issue was a criminal lapse in financial reporting that brought major embarrassment to MGM Mirage as well as state gaming regulators.
In 2003, former Mirage employee Christopher Morishita was sentenced to three years of probation for failing to mail to the Internal Revenue Service more than 14,900 Cash Transaction Reports. Federal anti-money-laundering rules require casinos and other businesses to report details of large cash transactions or face prison time and massive fines.
Morishita had accurately completed the paperwork but did not mail it — akin to filling out complicated income tax returns but purposely not sending them in.
The failure was not detected by company auditors or by state officials.
After Morishita’s replacement discovered the piles of completed reports, gaming regulators in 2003 fined MGM Mirage $5 million — the largest gaming fine in state history — and chastised the company for embarrassing the gaming industry. Morishita is the only person in Nevada to be criminally charged in connection with cash reporting rules.
As the dust settled, MGM Mirage revamped its auditing procedures and fired 10 managers, including Kocienski, the highest ranked of the bunch.
Kocienski sued, claiming wrongful termination. In court, MGM Mirage said Kocienski was partly to blame because he was aware that the cash reporting department, led by Morishita, was behind in auditing the reports. Perhaps more concerned about saving his job than tackling the problem, Kocienski kept his higher-ups in the dark about potential red flags, the company said.
Cash reporting violations belong on the same zero-tolerance short list with underage gambling and cheating, MGM Mirage attorney Gregory Kamer said in court Friday.
Kocienski was fired “for having failed at his job” in not watching Morishita’s work, Kamer said.
Kocienski’s attorneys said he didn’t know of any failure to mail documents. Kocienski, they said, was so high in the management ranks that it was not expected of him to personally double-check Morishita’s work. “You can’t fire someone for not foreseeing the unforeseeable,” attorney David Marks said. “You had a criminal who was lying to everyone and showed no signs that anything was amiss.”
Employers can fire executives just as they do rank-and-file employees, but employment contracts protect company officers with lucrative pay packages should they be terminated without cause. MGM Mirage said it had fired Kocienski for cause, giving him $175,000 in severance but denying him the $4.5 million balance of his five-year employment contract — $3.4 million in stock options and $1.1 million in salary.
The Clark County District Court jury agreed with Kocienski on Friday and ordered MGM Mirage to pay off his employment contract.
There was more at stake than the money. Kocienski risked his reputation by taking the matter to court. Typically, such disputes are settled quietly, before going to trial.
But Adam Levine, who also represented Kocienski, thinks his client is too prominent and well-respected to have been blackballed by the industry for challenging one of its most prominent employers.
Kocienski, who has more than 20 years of experience in gaming finance, recently joined Tropicana Entertainment as chief financial officer.
A similar lawsuit filed by former Mirage Controller Brian Burtenshaw against MGM Mirage is still in progress.
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