State authorities said Thursday they have shut down a multimillion-dollar illegal video gambling operation in Allegheny, Fayette, Washington and Westmoreland counties.
Pennsylvania Attorney General Josh Shapiro’s office announced nearly three dozen charges filed by Pennsylvania State Police against Anthony Zenner, 58, of East Washington.
The AG’s office said Mr. Zenner ran his operation in 33 bars and clubs throughout the four counties and alleged that he illegally pulled in $7 million in profits over the past decade.
Mr. Zenner was arrested Thursday. He is charged with corrupt organizations, dealing in proceeds of unlawful activities and gambling devices.
“He cooperated with the initial search of his home and his business. We are just getting the charges today and intend to defend against all of them,” Mr. Zenner’s attorney, Christopher L. Blackwell, said.
Authorities said Mr. Zenner owns Zenner Vending, which gave bars, clubs and restaurants at least 142 illegal gambling devices from 2006 to 2017, according to a news release from the AG’s office.
“Today we’ve ended Tony Zenner’s video gambling operation,” Mr. Shapiro said. “This defendant raked in millions of dollars in illegal proceeds, draining money from Pennsylvanians — and from the commonwealth of Pennsylvania — over the last decade.”
The arrest is the culmination of an investigation that began in 2016 and involved undercover surveillance. Bars and clubs that had the machines paid cash out to players who won credits, the AG’s office said. A statewide investigating grand jury determined that Mr. Zenner split his profits evenly with the venue owners, according to Mr. Shapiro. The attorney general alleged that Mr. Zenner raked in $14,470 a week.
Mr. Blackwell disputed that number and said his client’s vending machine business pulls in income from a broad array of devices.
“This is a legitimate vending machine company. He has everything from dartboards, pool tables to soda pop machines, snack machines,” Mr. Blackwell said.
“He obtained a license to place these machines within their municipality. He paid the appropriate taxes and the licensing fees that go along with that. So we’re going to look at each and every location, and there’s 33 of them, to determine which ones he had a license for and paid the municipality for the privilege of putting a machine in their locale.”
A grand jury presentment said an undercover state trooper watched Mr. Zenner remove money from video gambling machines as well as from dartboards and pool tables and mixed the money.
“The grand jury concludes that this commingling of the proceeds was motivated, in part, to hide, conceal and/or disguise the true source of the illegal proceeds,” the presentment said.
Undercover investigators received payouts from the bar or club and witnessed customers getting paid, the presentment said.
Authorities in April seized 142 video poker machines and $83,000 in cash from Mr. Zenner’s warehouse in Washington County and his car. They also froze $63,000 in five bank accounts they said were controlled by Mr. Zenner, according to a news release.
Mr. Blackwell said he is not sure that all the confiscated machines belong to his client.
The presentment said 21 cash deposits were made into a Zenner/Zenner Vending bank account between January 2016 and April 2017 that totaled more than $56,000. The grand jury alleged that the transactions helped finance Zenner Vending with illegal proceeds from video gambling.
Several witnesses testified before the grand jury about how Mr. Zenner would make weekly rounds — one referred to it as “Tony day” — to collect the money from legal and allegedly illegal devices and split it with the bar owners, according to the presentment.
Mr. Zenner was arraigned before District Judge Robert Redlinger. Bail was set at $30,000 unsecured.
Jonathan D. Silver: jsilver@post-gazette.com, 412-263-1962 or on Twitter @jsilverpg. Staff writer Jenna Wise contributed.
First Published: July 12, 2018, 6:17 p.m.
