An Inside Look at the Tran False Shuffle Scam

A federal grand jury in San Diego has indicted 19 defendants on charges related to an alleged racketeering enterprise and a scheme to cheat casinos across the country out of millions of dollars, Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney for the Southern District of California Karen P. Hewitt announced today … an indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt. Parties that have information relating to the investigation may contact the Federal Bureau of Investigation’s San Diego Field Office…    
–The United States Department of Justice, May 24, 2007

Today most of us are well aware of a scam that came to light in May 2007 after a federal indictment was handed down in a Seattle U.S. District Court that named 19, and later 24, people for allegedly cheating 18 casinos (10 of which were tribal) in several states by using a false shuffle. A false shuffle is a cheating method in which the dealer gives the impression that all cards have been mixed but actually leaves a predetermined number of cards in the same order as the previous shoe, enabling players who are in on the scam a major advantage; it is a prime example of a deal-agent scam, where a dealer and patron work together to defraud a casino. The indictment named several members of the “Tran Organization,” a known cheating team; the Mayor of Seattle’s son, who worked as a floor supervisor; and two dealers who worked at a casino in Northwest Washington.

Dealer-agent scams are a casino’s worst nightmare, especially when the scam infiltrates upper-level employees who are supposed to act as fail-safes against dealer cheating. For example, floor supervisors are hired to maintain the integrity of the game and to watch the dealer, who in turn is entrusted to deal the game correctly. When an outside organization pays a casino dealer to perform a false shuffle and a floor supervisor to look the other way, it could potentially be devastating to a casino. In this case, casinos across the United States and Canada suffered losses close to $7 million before the indictment was handed down. Doug Addler was at ground zero for this now-resolved cheating event. His casino’s losses amounted to less than $100,000, but that is still enough to impact any casino’s bottom line.

While many accounts of this massive false shuffle scam are out there, Addler’s first-hand experience detecting the scam in fall 2005 can shed light on what really happened and dispel any inaccuracies.

While employed as the surveillance manager of a casino in Northwest Washington, Addler’s duties included checking all winning play on games that had an aggregate win of more than $2,500. Through his investigation and notifications from observers in the surveillance room, it was noted that an Asian male patron from Oregon was frequently winning at mini-baccarat. This man, now a known Tran member, brought two friends with him, who also played. At the time, the wins were small but adding up. Basically, they were flying under the radar. Doug conducted a search into the player on the casino’s identification systems but had no positive matches; there were also no alerts about a false shuffle team in the area. The patron had told staff members that he was part of the World Wide Poker Tournament and liked the area. He even said he was thinking about buying property and starting a restaurant. He and his friends were tipping well, so they were the dealers’ best friends.

Then in late October 2005, after four or five visits by this patron, everything changed. On one Saturday night, he cashed out a substantial amount of money. Addler immediately requested and observed the play from the table. He saw that when certain dealers shuffled, the shoe consistently produced winning results for the patron and his associates—thousands of dollars worth of winning results. In addition, one of the players would always notify the dealer when a mistake was made on the game; in retrospect, he must have wanted to ensure that the falsely shuffled cards were kept in order.

Because this casino was in upstate Washington, Addler had to ask himself why a patron from Oregon would travel to such a remote location to gamble. Coincidently, a new online search engine for identifying scams and cheats out of Oregon was now available for his use. Addler figured that if the cheat was from Oregon, he would stay in Oregon unless there was a reason he couldn’t be there, so he checked the website. Lo and behold, the patron’s photo popped up under mini-baccarat scams—along with a number for the California Department of Criminal Justice. Addler immediately notified the casino’s director of operations and the tribe, and then called the number listed on the bulletin.

From our experience in surveillance, we both know that when you’re on the brink of catching something big, the feeling is something between excited and nervous… but mostly nervous. That’s certainly how Addler felt when he made that call, which ultimately put him in touch with FBI field agents who verified his suspicions. The casino had been hit with a false shuffle scam.

According to federal agents, the scam works like this: An organization recruits employees (who are usually disgruntled) to participate in the scam, paying them up to $10,000 per week. The organization then talks to a floor supervisor, who refers them to dealers who are then trained to perform the false shuffle, usually in a hotel room. When the false shuffle is executed, a player who is in on the scam hand records all cards dealt onto a mini-baccarat tally card that is hidden behind the in-play mini-baccarat player tally card showing winners and losers. Generally the player would signal for the dealer to perform the false shuffle and create a slug (a group of cards that stays in the same order from the previous shoe) of 40 to 50 unshuffled. The dealer shuffles over the top of the slug, giving the fixed overhead camera the illusion that the shuffle is carried out according to procedure. The player signals by placing his fingers in a certain area on the tally card. After the dealer performs the false shuffle, the player increases his bet to the maximum on the table to ensure the highest amount of return for the team.

At one point during the investigation, federal agents tipped Addler off that the cheating team would be in the casino the following weekend and provided information on their flight and type of vehicles they would be using. He informed the tribal gaming council and the director of operations, then spent the next two days getting ready for the false shuffle team to arrive, including meeting with state and federal agents to discuss optimum camera placement and coverage to best catch the cheaters. In most casinos, the tables are taped from a fixed angle that may not always provide a quality shot of a false shuffle.

Then on a Thursday afternoon, Addler was advised that the team had landed at Sea-Tac Airport and was checking into a local hotel; they had stopped at a local mall so the team members could buy Seahawk gear to fit in with the locals. They were driving a red Hummer and a white Lincoln Town Car. Addler had just finished purchasing new tapes to ensure quality video (there was no digital yet).

Addler had enlisted the help of his best observers to ensure quality coverage that day, but from the onset, he wasn’t sure the cheating team would strike—the dealers that he believed were involved were not working that day. The team came in and played blackjack before moving to mini-baccarat. Addler and his team observed their play for several hours with no sign of the false shuffle, but the team did win a few thousand dollars legitimately. The casino was asked to allow the team to return the following day, as everyone believed that the cheating team was just testing the waters.

The following day Addler received word in the early afternoon that the cheating team was 15 minutes out, again driving a red Hummer and a white Lincoln. He was once again flanked by his outstanding surveillance staff. Upon arrival, the man and his associates went to a mini-baccarat table where one of the suspected dealers was working. Shortly after they sat down, a new shoe started. Then, just as expected, the man was observed recording all the cards in sequential order on a second tally card. When the cut card came out, signaling a shuffle was about to take place, the dealer performed a false shuffle by taking a slug of cards from the top of the discard rack, putting them on the table apron in front of him, cutting the deck in half, and proceeding to shuffle over the top of the slug, which was about as thick as a single deck of cards.

The man was then allowed to cut the deck, which gave him the opportunity to move the slug to the middle of the deck. By the time the cards in the slug came into play, the dealer who performed the false shuffle would be off the table and not readily suspected.

The shoe was then played through, with the team placing smaller bets until the cards that were part of the tallied slug appeared. At this point, the man began to place max bets … until he was approached and asked to leave because his play was “too good for the casino.” He departed with his team in the red Hummer and white Town Car. The shoe was taken into custody and the table was closed.

The casino was asked not to take immediate action against the dealers, floor personnel or false shuffle team members while federal agents gathered more evidence for the indictment. The implicated employees were allowed to continue working, which was exhausting from a surveillance perspective. It is a testament to a quality of the surveillance department’s commitment to confidentiality, as it took 18 more months before the indictment was handed down. A shockwave resounded through the casino when the indictment was made public. The video obtained during the investigation is now used as a training tool for FBI field agents.

Addler’s initiative and the work of his surveillance staff helped the United States Department of Justice successfully prosecute this case. Unfortunately, it was with great cost to many casinos. Losses, such as the $100,000 at Addler’s property, are difficult to recover once the crime has been committed, as the cash is typically dispersed and divided among team members immediately.

Our question now is when is enough, enough? It took five years to resolve the investigation, during which time the criminal enterprise pilfered millions from 18 casinos. At what point do you stop the meter? In this case, the casinos exercised great patience and tolerated great losses. But while the time and expense can be frustrating, keep in mind that you can’t know till you know. As surveillance professionals, we know that suspicion isn’t enough; we must find evidence and make sure our facts are right, being thorough and not rushing judgment. Our advice to you is to develop your own network to ensure you are fully aware of all the latest scams and cheating techniques; also, remember that size does matter—in this scam, a lot of the larger casinos incurred higher losses. Surveillance departments at large casinos are burdened with the task of watching multiple tables and not being able to focus exclusively on a single game.

The lessons learned from this matter are many, including the value of a swift-acting team—as surveillance and security professionals working in the business community to resolve losses, if it took us up to five years to resolve a matter, we’d be out of jobs pretty quick … unless casino management just didn’t care or didn’t notice.

On this note, we’d like to point out that the May 2007 press release included this line: “… The subjects arrested and indicted colluded with casino dealers and engaged in a sophisticated card counting scheme to cheat casinos out of large winnings.” The term “card counting” means something different to us in the casino business, and card counting is not a crime—just ask the MIT card counting team members. This is a major reminder of why we have gaming regulatory agencies and why they should be more active in the education of the highest levels of enforcement and prosecution.

But overall, the time it took to resolve this matter not withstanding, the successful prosecution of this scam was a victory for the gaming industry—and a reminder that cheaters and scams are not relics of the past, despite the ever-improving technology at our disposal. And while forward-thinking casino operations are deploying table game management solutions that can even detect false shuffles, nothing beats a team you can trust. As Addler says, sometimes you have to trust somebody. As surveillance guys, we can’t do it alone. Addler was very fortunate to have a director of operations he could trust when dealing with this cheating scam, but it’s just as important to have quality employees who have your best interests and the casino’s best interest at heart. We are only as strong as our weakest links.

Phillip Hogan, chairman of the National Indian Gaming Commission (NIGC), put it well when he said: “This operation is a good example of the high-quality work tribal gaming regulators do in protecting fair play at their facilities. It also exemplifies the benefits of tribal, state and federal investigators, and prosecutors.”

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