Brandon Steven, others subject of federal investigations

Businessman Brandon Steven said Tuesday that he is a subject of a federal inquiry into high-stakes poker and his efforts to open a casino in Kansas.

It was one of several revelations Tuesday about ongoing FBI inquiries in Wichita, although it is not clear if the situations are related. Among the developments:

▪ A Wichita lawyer said his office and four west-side homes had been searched on Feb. 8. The FBI, he said, confiscated from his office a pillowcase filled with $22,000 in cash and jewelry.

▪ The Wichita Police Department announced that two officers had been suspended and that an internal investigation is underway. Mayor Jeff Longwell had confirmed Monday that the FBI has had an ongoing investigation over the past two years and that the department was cooperating.

▪ The Wichita Eagle and others received letters from the Justice Department saying that telephone communications between them and Steven and former state legislator and current Sedgwick County Commissioner Michael O’Donnell had been intercepted in 2015.

Officials with the FBI and the U.S. Attorney’s Office declined to comment.

No charges have been filed.

Letters, phone calls

Letters from the U.S. Attorney’s Office were delivered Tuesday to several people saying that phone communication with Steven was intercepted under federal law last year.

One letter said the order applied to Steven and a phone number subscribed to Genesis Health Club Management LLC and used by Steven. Steven said the number is a private line not associated with Genesis Health Club.

Steven is a partner in Genesis, car dealerships and other businesses.

When contacted for comment about the letter, Steven said: “I’m aware of the broad nature of this inquiry. As you know and everybody knows, I play high-stakes poker.

“And from what we understand, they are looking into my poker and my involvement with Castle Rock Casino.”

He and a team of Wichita investors tried unsuccessfully to win a state bid to build the Castle Rock Casino in southeast Kansas.

“I’ve retained counsel, and we’re going to fully cooperate with this matter,” Steven said Tuesday.

One letter, dated Feb. 1, was delivered Tuesday to the home of Carrie Rengers, a Wichita Eagle business columnist. The letter said the conversations were intercepted between May 14, 2015, and June 13, 2015. A similar letter was delivered to The Wichita Eagle.

The casino bid was awarded on July 2, 2015, to another developer.

“This notice does not mean that you are being charged in court with anything,” says the letter, signed by Assistant U.S. Attorney Aaron Smith. “This is simply a notice the law requires we send you,” it says. “It only means that you, or someone using a telephone subscribed to you, were intercepted talking with a person using the telephone listed above.”

U.S. Attorney’s spokesman Jim Cross said he couldn’t comment on any investigation.

A ‘lawful presence’

Wichita attorney Steve Joseph said the FBI searched his office, Galaxy Venture Capital Fund, on Feb. 8.

He said the FBI also searched four west Wichita homes.

Joseph said he knows the homes were searched because he drove by each location on Feb. 8 and “saw cops all over the place.” Wichita police set up a perimeter at the locations during the searches, he said.

Joseph said his business near 21st and Zoo was searched because one of the people whose homes was searched brought a brown pillow case with items to his business. The person brought the items there because he knows someone who is a business associate of Joseph’s, Joseph said.

According to an inventory slip of the items confiscated by FBI agents, the pillow case included $22,000 in cash, jewelry, a Rolex watch, and safety deposit box keys, Joseph said.

The FBI confirmed last week that it had “a lawful presence” at several residences in the Wichita area.

Joseph said he doesn’t bet or gamble, has never met Steven and is “not at all” a target of the investigation. His only involvement, he said, is that his business was searched because the pillow case was brought there.

Around Wichita, Joseph said, “It’s not a big secret” that large poker games have been going on.

John Rapp, an attorney for Brandon Steven, said he couldn’t comment other than to say, “We’re working to clear up this matter, and we are cooperating with the government to try to put this matter behind everyone.”

Editor’s note: Brandon Steven is among a group of investors who in 2016 purchased the building occupied by The Wichita Eagle. The Eagle plans to move to a new location this spring.

Contributing: Carrie Rengers of The Eagle

This story was originally published February 14, 2017 at 8:05 PM with the headline "Brandon Steven, others subject of federal investigations."