ST. LOUIS – Former St. Louis County planning commission chair Douglas Morgan secretly advanced a casino plan for himself and offspring of Madison County felons Tom Lakin and Rick Jones, according to federal grand jurors.
They issued a superseding indictment on June 16, adding wire fraud charges to bank fraud charges the original indictment alleged in April.
They now charge that Morgan coaxed $1.5 million from gullible victim "J.T."
"Morgan shared non public information with J.T. about North County Development's proposed casino project, including information about the straw purchaser of the land proposed for the casino site and details of the purchase options covering the land deal," U.S. Attorney Richard Callahan wrote.
"Morgan also shared information with J.T. about Morgan's purported regular meetings with a representative of the Missouri Gaming Commission, and the purported information which Morgan claimed to have obtained during those meetings relative to the North County Development's proposed casino project," he wrote.
"Morgan included J.T. in one or more discussions with the attorney for North County Development relative to issues involving North County Development's casino project," he wrote.
"Morgan included J.T. in the review of a power point presentation about North County Development's proposed casino project intended to be shown to potential investors," he wrote.
He wrote that Morgan told J.T. that capital contributions of North County Development member Julie McDonald were all obtained from her father, Rick Jones.
Jones had stolen millions from BP, and he serves time for failing to declare it as income.
According to the indictment, North County Development applied for a Missouri gaming license so it could build a casino and other attractions on 377 acres in Spanish Lake.
Callahan wrote that North County Development identified Kenneth Goldstein, a long time friend of Morgan, as an owner.
He wrote that it identified another owner as Brad Lakin, son of Lakin Law Firm founder Thomas Lakin, another long time friend of Morgan.
Tom Lakin serves time on morals charges.
The application identified McDonald as third owner.
North County Development didn't disclose Morgan's interest in its license application, Callahan wrote.
The application also failed to mention J.T.
Callahan wrote, "Morgan told J.T. that J.T.'s involvement in the North County Development proposed casino project could not be publicly disclosed because Morgan was afraid that if it was disclosed, his close friendship and relationship with J.T. and Kenneth Goldstein would lead the public to understand that Morgan also had an interest in the casino development."
The scheme started in 2002, according to Callahan.
He wrote that Morgan represented to J.T. that he held an interest in an entity that would develop casinos in St. Louis, Branson, Chicago, and a western state.
He wrote that J.T. invested $160,000 up front and kept investing.
He wrote that Morgan used it all for personal expenses.
He wrote that in 2005, Morgan asked J.T. to cover "soft costs" for a North County casino plan.
J.T. kept paying and Morgan kept spending, according to the indictment.
Morgan also convinced J.T. to loan him money that he would repay as soon as the Internal Revenue Service released funds from a trust account.
That line netted him more than $200,000 from J.T. and $250,000 from three other gullible friends, according to the indictment.
Morgan's bankers fell for the line too, according to the original indictment.
"As Morgan well knew, neither the IRS nor any othe rgovernmental agency had seized, frozen, or otherwise held up any funds which he purported to hold in one or more personal trust accounts," Callahan wrote.
Last year, North County Development withdrew its application prior to public hearings.
In February, St.Louis County Executive Charlie Dooley appointed a replacement for Morgan as planning commission chairman.
Morgan's lawyer, Joseph Hogan of Clayton, Mo., waived arraignment on July 1.
"Douglas Morgan understands the nature of the charges and the elements were explained to him," Hogan wrote.
"Due to a serious medical condition, Douglas Morgan is unable to appear in court at this time," he wrote.
"Douglas Morgan waives his right to have his indictment read to him in open court," he wrote.
"Douglas Morgan enters a plea of not guilty," he wrote.
District Judge Mary Ann Medler presides.