BISMARCK - The North Dakota attorney general's office wants a gaming organization to turn over money designated for charities.
The office's Gaming Division filed a lawsuit Monday in Bismarck against the IQ Fund, which operated Smoky's steakhouse and casino in West Fargo until closing in October.
The IQ Fund also surrendered its state gaming license in October, while it was under investigation by gaming officials.
The state wants a judge to declare that the IQ Fund obtained its gaming license fraudulently, that it submitted false quarterly tax returns to the Gaming Division and that it violated or refused to comply with gaming laws. The state wants a judge to force the IQ Fund to "immediately surrender to the attorney general no less than $64,546, representing net proceeds from IQ Fund's gaming activities."
The attorney general would then distribute the money to charities the IQ Fund said would benefit from its gaming operation, the civil complaint says. The IQ Fund's stated corporate purpose is to "support education."
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The Gaming Division also wants IQ Fund board members Gary Minard, formerly of Bismarck, and Damiana "Ana" Markel of Mandan held "personally, jointly and severely liable for the amount."
Minard is president of the IQ Fund board and Markel is the corporate secretary.
The IQ Fund was previously known as Pinto Spirit Development and Bear Soldier Industries.
"It's the first time we've ever gone after (a gaming organization), taken action against a board." said Keith Lauer, state gaming director the past 13 years.
The civil complaint against IQ Fund, Markel and Minard details how Minard "purported to provide proof" that IQ Fund's charitable distribution trust account contained tens of thousands of dollars. But three days after $57,722 was deposited in the trust account, it was removed, leaving the trust account with a balance of $63.75.
Markel and Minard also signed quarterly gaming tax returns for the first and second quarters of 2004 containing false bank account balances, the complaint alleges. The company's bank records also contain inexplicable entries, said Assistant Attorney General James Thomas, who noted that a $65,000 check from the U.S. Treasury was deposited in the gaming account.
"That doesn't appear to be gaming proceeds," Thomas said.
Minard also faces a misdemeanor criminal charge in Burleigh County, which alleges he skimmed money from the IQ Fund's gaming operation. He has a trial date set later this month.
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Minard received publicity last year when he unsuccessfully sought a state Racing Commission license to add off-track pari-mutuel betting to the gaming at Smoky's. Commissioners said there were too many unanswered questions about a tribal court judgment against Bear Soldier/Pinto Spirit. Minard, who has since relocated to Minnesota, could not be reached for comment Tuesday. He did not respond to a message left with a Minneapolis company he is now associated with.
Markel could not be located through North Dakota telephone listings.
The case is filed in Burleigh County District Court. Thomas said Markel and Minard have not yet been served with the court papers.
Readers can reach Forum reporter Janell Cole at (701) 224-0830
Forum reporter Andrea Domaskin contributed to this article
