by LAWRENCE MESSINA, Associated Press Writer
8 months ago | 685 views | 0

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CHARLESTON, W.Va. (AP) — West Virginia’s Lottery Commission voted Wednesday to seek a federal judge’s approval before moving to suspend an indicted provider of 640 video lottery machines.
Commission members cited the June 8 order from U.S. District Judge John T. Copenhaver Jr. preserving the assets of Joe C. Ferrell and his company and co-defendant, Southern Amusement.
Indicted earlier this month, Ferrell and Southern Amusement face 48 felony counts alleging such offenses as racketeering, illegal gambling and the bribing of a Lottery inspector.
Copenhaver ruled after a federal prosecutor petitioned to seize at least $5.5 million of Ferrell’s assets, including the company and its machines, if he’s convicted.
Lottery Director John Musgrave advised the commission to suspend the company’s license to lease machines. Commissioners instead elected to wait until their July meeting, and in the meantime ask the attorney general’s office to seek Copenhaver’s approval.
Lottery counsel John Melton had told the commission that neither he nor the federal prosecutors handling the case believe that suspending the operator’s license would violate the order. But an attorney for Southern Amusement, Wendell Turner, argued otherwise.
‘‘The injunction is not only against reducing the value of the machines, but reducing the value of the stock of the company,’’ Turner said.
Southern Amusement is one of the state’s largest suppliers of ‘‘limited’’ video lottery machines to licensed bars and clubs. With permits for 675 devices, the most allowed any one operator, the Logan County company currently leases 640 poker- and slot-style machines to 128 retail locations. Statewide, 8,101 machines operated in 1,628 bars and clubs last month, according to Lottery figures.
Southern Amusement’s machines rake in $2.3 million a month, Melton told the commission, or about 6 percent of May’s statewide total. The government share of that totals $1.2 million, leaving the bars and clubs with around $500,000 and Southern Amusement with the rest.
‘‘It’s a significant amount of money that would cost the state of West Virginia,’’ said Commissioner Bill Clayton, who added later that ‘‘we all feel that this has hurt the integrity of the Lottery.’’
Because they are presumed innocent, Ferrell and his company should be allowed to operate until the case against them is resolved, Turner argued.
‘‘You can’t lose sight of all of the innocent parties — lenders, employees, retailers, suppliers,’’ he added.
If allowed to suspend the company, the commission plans to give it and its retail customers time to appeal. Lottery officials expect a judge might freeze the suspension pending the outcome of the criminal case.
Ferrell, a former seven-term Democratic lawmaker from Logan County, bought Southern Amusement in 1995. The indictment alleges he allowed its video poker and slot machines to pay out illegally until the Legislature outlawed those devices and replaced them with Lottery-run versions in 2001.
Ferrell, 62, later ran illegal gambling in neighboring Kentucky, the charges said. The bribery-related counts allege he paid an inspector who then ignored Lottery violations at Southern Amusement and its retail customers. She also repaired the company’s machines without the agency’s approval and while on the clock as well as after-hours, the charges allege.