Crime & Courts

Wichita businessman Johnny Steven ran illegal gambling operation, witnesses say

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Johnny Steven — part of a Wichita entrepreneurial empire — helped run an illegal gambling business that has been a target of a years-long federal investigation, witnesses testified Monday in court.

Johnny Steven’s attorney, Kurt Kerns, said Monday evening that his client “has not been charged with any kind of crime whatsoever, so we have no further comment.”

The allegations against Johnny Steven came in court on the first day of a federal trial for a former Kansas Highway Patrol trooper charged with lying to the FBI during its investigation into illegal gambling in Wichita.

It is the first trial since the investigation surfaced publicly more than a year ago.

In January, Michael Frederiksen, who had spent 25 years as a Kansas Highway Patrol officer before moving to a federal court officer job, was charged with two counts of making false statements to federal investigators, according to the U.S. Attorney’s Office. Frederiksen’s defense attorney, Marcos Montemayor, argued Monday that Frederiksen was just another poker player, not a big-time player, who was caught up in the federal investigation and that investigators had unfairly pressed his client for details that had happened three years earlier.

The second charge accuses Frederiksen of lying to federal agents when he said he had only about 10 contacts with “J.S.” when Frederiksen knew he had “regular and numerous contacts” with J.S. The charge said J.S. was Frederiksen’s insurance agent and that J.S. was “responsible for private poker games conducted by an illegal gambling business in Wichita.”

Until Monday, the identity of “J.S.” was not clear. The first mention of Johnny Steven came in court Monday. Assistant U.S. Attorney Mona Furst used his name when alluding to an FBI affidavit’s account of "J.S." being Frederiksen’s insurance agent who invited him to poker games. Johnny Steven is listed in an online profile as "a successful insurance agent with multiple agencies in Wichita and the Kansas City Area."

A Wichita police supervisor testified that in early 2014, he helped investigate an illegal gambling operation being run upstairs in a building on Douglas near Washington. He once went in to play poker while undercover. Some players paid up to thousands of dollars to play there, he said he was told.

According to testimony and an audio recording presented by prosecutors, one person involved in the operation told the undercover officer that Johnny Steven was one of the people who ran the illegal gambling business.

According to the testimony and recordings, attractive waitresses wearing skimpy tops served alcohol and food prepared by a chef on site. Players also could get shoulder massages.

Johnny Steven and Daven Flax, known as “Smoke” because he owned smoke shops, allegedly owned the operation together, according to the testimony.

On Jan. 12, Flax and Danny Chapman pleaded guilty to operating illegal gambling businesses. The two are among several Wichitans whose phone conversations were intercepted by the federal government in the spring or summer of 2015, including Johnny Steven's brothers, Brandon and Rodney Steven, and Sedgwick County Commissioner Michael O’Donnell, who at the time was a state senator.

Last year, Brandon Steven told The Eagle that he was the subject of a federal inquiry into his playing of high-stakes poker and his involvement in trying to open a casino in Kansas. The Steven brothers have for years been involved in an array of businesses, including car dealerships, fitness clubs, eating establishments and professional sports.

At Monday’s trial, the former undercover officer testified how he went into the Douglas location while undercover, posing as a player who got invited into the game.

He said he came under suspicion by some of those running the game when they saw him taking pictures with his cell phone.

Another witness, a Wichita police detective described surveillance he and other investigators did from unmarked cars around the East Douglas gambling spot in early 2014.

He said he mostly saw men going in, but some of the people walking up to the second-floor door were women “dressed provocatively” in mini-skirts and high heels, he said.

Shea said that when he and an FBI agent interviewed Frederiksen in early 2017, Frederiksen said Johnny Steven invited him to poker games at the East Kellogg and East Douglas locations. Frederiksen told the investigators that he didn’t see Steven at either spot, Shea testified.

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