Bingo Bonanza 

Charitable bingo is supposed to be a way for nonprofit groups to raise money. So why is all the big money being made by profit-oriented entrepreneurs?

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Brown eventually replaced Brennan with Chester Piet, who had managed bingo games at Triple Seven and Oakland's Foothill Square for other groups. Piet said Casteel kept raising the rent because he saw how much money his tenants were raking in. "He said if they complained just to tell them that he's the landlord and that's what landlords do," Piet indicated in a written statement.

And complain they did. Brown went to the Vallejo police department and formally complained that Casteel was driving her theater out of the bingo business. But city officials didn't pursue the matter. In the meantime, Casteel collected a killing in rent. In his statement, Piet described delivering up to $10,000 in cash each week to Casteel's Concord spa.

Casteel eventually kicked out the theater and his other tenants and replaced them with three of the groups running games in Oakland: Lodestar for Youth, Transitional Living Collaborative, and Breast Cancer Development and Research Society. In exchange for being evicted, Casteel began paying the theater $5,000 a month to help out with its mortgage.

Brown noticed that the checks came from the very charities that had displaced her theater and the other tenants. She took this as a sign that Casteel was illegally involved in the finances of his supposedly charitable tenants. According to state law, it is a misdemeanor for any person to receive or pay a profit, wage, or salary from any bingo game, and the Vallejo city ordinance forbids operators such as Casteel from having a financial interest in the charities that rent their parlors.

After five months, Casteel informed Brown that he would no longer be sending her any checks. "I'll never forget that conversation," she said in an interview. "He told me that he needed the money to buy goats for starving people in Zimbabwe."

Once they were booted out of the Triple Seven, Brown and her theater group tried to run their own games at a local Elks Club. They ran games once a week for twelve weeks, and got their supplies from a supplier in Los Angeles because none of the local suppliers would sell to them. Brown alleged in court that local suppliers were threatened by associates of Casteel who said they would pull their orders if the suppliers sold to Casteel's competitors. But supplies were expensive to ship from Los Angeles, and the theater couldn't afford it. Brown also alleged in the lawsuit that on nights she tried to run games at the Elks Club, Casteel's tenant at the Triple Seven would lower its prices from their normal $35 "buy-in" down to $20. "Nights they ran those prices, they had a full house," Brown said.

In 2006, Brown's theater and some other nonprofit groups sued Casteel and two of his companies, along with the three nonprofits running games at Triple Seven. They accused Casteel of creating fraudulent nonprofit groups willing to illegally pay the exorbitant rent he was charging so that he could appropriate bingo proceeds for non-charitable purposes. All of the charitable groups that ran games from Triple Seven claimed that they were unable to use their most successful form of fundraising because Casteel had monopolistically closed the bingo market to other organizations.

The lawsuit alleged that all of the nonprofits running games out of the Triple Seven shared a post office box in Moraga that was rented by Casteel. They also listed the phone number and address of Casteel's office in Martinez as their contact information. None of the nonprofits appear to have public phone numbers, web sites, or physical addresses to confirm their existence. And according to court records, all of the "volunteers" working the parlor floor happened to be Casteel's relatives or employees of hisbail bonds business. In court records, one of his employees admitted to working forty hours per week as a bingo hall manager. "That's what they do," Brown's lawyers said. "They run these charities for Casteel and they get paid for it."

In a recent phone conversation, Casteel declined to answer questions about the lawsuit and hung up before he could be asked other questions. However, attorneys for him and the other defendants argued in court that the allegations were false, and lacked evidence.

But the California Secretary of State's office indicated that, two months after the lawsuit was filed, Casteel cancelled his state registration for the implicated companies. And one month after that, according to the charity's minutes, all three nonprofits held meetings on the same date at Casteel's office in Martinez in which their boards voted to remove him as a signer on their accounts.

Nonetheless, a judge in Contra Costa County Superior Court dismissed the lawsuit in early July. The judge ruled that only cities and district attorneys have the jurisdiction to challenge violations of a city ordinance. Brown's attorney has taken up the matter with the city of Vallejo, and says he plans to keep working on the case.

But he is having a hard time implicating Casteel in any illegal activities. Charging high rent is not illegal. Neither is having friends or even employees running games on the parlor floor — as long as they are not employed by the nonprofit running the bingo game. Even if Casteel was involved in the charities running games at his parlors, it would be difficult to prove that he had a financial interest in those charities without a detailed exploration of his and their finances. As for the other defendants, they argued in court that the "monopolistic" behavior they were accused is lawful in California.

Finally, the state's $2,000-a-month overhead limit came up in court, but it worked against Brown since it was the theater company, and not Casteel, that was actually breaking the law. In a recent interview, Brown said Casteel's lawyers asked her why she paid high overhead costs for rent and supplies if she knew it wasn't legal. "I told them that we had no choice," she said. "If we wanted to have a bingo game Vallejo, we had to pay."

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