“It was off the charts.”
Leila McDonough, the New Hampshire Lottery Commission auditor, described the volume of issues the state had with Andy Saborn’s Concord Casino.
McDonough made the comments during a Monday hearing over whether the former state senator can keep his casino owner’s license despite accusations of fraud, including using COVID relief money to buy sports cars. While Sanborn’s attorneys claimed Sanborn did nothing wrong, McDonough testified Sanborn never cared to follow the rules.
The Department of Safety showdown featured one witness for the state, McDonough, the woman who for years was tasked with trying to get Sanborn to follow state regulations.
McDonough’s testimony painted the picture of Sanborn as entitled and stubborn, a casino operator whose refusal to follow basic accounting procedures created a huge mess — or worse, led to massive fraud.
For instance, when a casino owner claims to have hundreds of thousands in cash, but he won’t let the state auditor in charge of casino financial reports count the money, you have a problem, she said.
“How can you conduct an audit that includes cash when you’re not allowed to count the cash?” McDonough asked. “Eventually, you have to assume the cash doesn’t exist since you’re not allowed to see it or count it.”
She said Sanborn was difficult to deal with since he opened his casino in 2018. Both Sanborn and his wife, state Rep. Laurie Sanborn, would call the commission to complain about audits and regulations they had to follow, McDonough said. The Concord Casino’s record-keeping was sloppy at best, she added, and Sanborn never appeared to take the legal requirement from the commission seriously.
McDonough is the Lottery Commission auditor who spotted enough red flags to go to the commission’s enforcement officials. who then brought in New Hampshire Attorney General John Formella. Formella has said a criminal probe by his office is also underway.
At one point, McDonough said, she found a statement of cash flows for July 2021 through to July 2020.
“This is actually the document that made me very concerned,” McDonough said.
That document showed Sanborn’s casino ran a $29,000 operating loss in that year and had no cash. This was at the time Sanborn claimed to have $200,000 in cash in secure locations McDonough was not allowed to see.
The statement also showed a large amount of cash invested in large equipment that had little to do with the business, like two Porsches and a Ferrari. The Ferarri was reportedly a gift for Laurie Sanborn.
Sanborn still managed to report $23,000 in cash for owner’s equity, McDonough testified. According to the records, Sanborn reported taking $5,700 in cash out of a bank and putting that into the equity cash amount.
“I’ve never seen this done with any other entity,” she said. “That was very odd.”
The financial statement McDonough revised seemed to show the whole operation was being funded with $844,000 in COVID relief loan money. The records also repeatedly showed large ticket purchases like the sports cars and tens of thousands in car parts charged business expenses.
McDonough reportedly uncovered Sanborn was also paying himself rent for the casino. The casino is owned through Sanborn’s LLC called Win, Win, Win LLC, but the Main Street property in Concord, where the casino is housed, is owned by another Sanborn LLC, The Best Revenge LLC.
The lease agreement between Best Revenge and Win, Win, Win has the casino pay the property $6,000 a year in rent, paid at $500 a month. According to the audit, Sanborn wired $163,500 from Win, Win, Win to Best Revenge between January and August 2022 to cover the rent.
That was more than $20,000 a month for the $500 a month rent.
McDonough said the records had a lot of large, round numbers for expenses that lacked detail and supporting documentation.
Sanborn was not at the hearing. One of his attorneys, Zachary Hafer, said Sanborn is in Boston receiving medical treatment. His legal team includes attorney Mark Knights, who argued the state’s case simply does not stand up to scrutiny.
“It is an incomplete story that has yawning gaps in the evidence,” Knights said.