Attorney General John Formella announced Thursday that an investigation into former GOP state Sen. Andy Sanborn found he is “not suitable to be associated with charitable gaming in New Hampshire due to evidence of COVID-19 relief fraud involving Concord Casino’s charitable gaming business.”

That is particularly problematic because of the license to a casino Sanborn owns and operates with his wife Laurie, who was just named chair of the state’s new Commission To Study The Effect Of Recent Changes Made To Charitable Gaming Laws. Laurie Sanborn’s new position was already raising conflict-of-interest questions before Formella’s announcement.

Even more problematic: The attorney general alleged Andy Sanborn used some money he obtained by fraud to buy Laurie a Ferrari F430 challenge racer as a gift.

“During a periodic, statutorily mandated suitability review of Concord Casino pursuant to RSA 287-D:11, the New Hampshire Department of Justice, together with the New Hampshire Lottery Commission’s Investigation and Compliance Division, found compelling evidence of COVID-19 relief fraud, as well as disguised purchases of personal luxury items using COVID-19 relief funds,” according to a statement from the Attorney General’s Office.

“The investigation found evidence that Mr. Sanborn fraudulently applied for and received at least one Economic Injury Disaster Loan (EIDL), with loan proceeds of $844,000. Further, investigators obtained evidence indicating that after receiving those taxpayer dollars, Mr. Sanborn used them to purchase at least three race cars: two Porsche 987 Cayman S racers for his personal use, and a Ferrari F430 challenge racer as a gift for his wife, Rep. Laurie Sanborn.”

Laurie Sanborn was named chair of the new charitable gaming commission created by the most recent state budget to review the industry’s practices. Critics noted the commission was dominated by casino owners like Sanborn and charities who profit from them, without any representative of taxpayers or the communities where casinos are located.

“I think Laurie’s a lovely person, but I don’t think she’s the right person to lead this commission,” commission member Sen. Lou D’Allesandro (D-Manchester) told NHJournal at the time. “It should not be chaired by a player in the gaming industry,” D’Allesandro said.

With her husband and business partner now facing criminal action, industry watchers wonder if the commission will take the opportunity to replace Laurie Sanborn as chair.

“They’ve got to do it, and they’ve got to do it right away,” one Granite State lobbyist told NHJournal Thursday.

Senator Tim Lang (R-Sanbornton) also serves on the new charity gaming commission. He told NHJournal he’s prepared to wait for more information before saying anything about Rep. Sanborn’s status as chair.

“I trust in the Department of Justice, as well as the Lottery Commission, to be thorough in their investigations, before taking actions against any businesses or citizens. I believe that Speaker of the House Packard, once all the facts are known (and not just from a press release), will take appropriate action,” Lang said.

“As for the Commission, the next meeting isn’t until mid-September. A lot can happen between now and then, so I’ll wait until the next meeting to see where we are before I comment.”

Sanborn could face both state and federal charges, according to Formella’s office.

“The Attorney General’s determination now triggers administrative action by the Lottery Commission that could result in Concord Casino’s loss of its facilities license and game operator employer license,” the Attorney General’s statement said.

“The Attorney General has also made a criminal referral to the United States Attorney’s Office – District of New Hampshire. The Attorney General’s Criminal Justice Bureau has opened a criminal investigation, including a review by the Public Integrity Unit of the actions of all of the individuals and entities involved.”

Republican legislators told NHJournal they were waiting to hear from Speaker Packard regarding the future of Rep. Sanborn and were unwilling to comment until then. But several speculated that, given her role in the casino business that allegedly scammed the system, it’s hard to believe she was unaware of the activity.

At a minimum, multiple sources told NHJournal, Rep. Sanborn will be forced out as chair of the charitable gaming commission. Asked if she should step down, commission members Formella and McIntyre declined to respond.

“People are waiting for her [Sanborn] to do the right thing,” one legislative source told NHJournal, meaning to step down from the committee. “If she doesn’t, this could get ugly.”