A former Kansas Highway Patrol trooper lied to the FBI in its investigation of illegal gambling around Wichita, a jury found Tuesday.
While the federal trial focused on that narrow question, the testimony gave the most detailed look so far into the investigation, which has spanned several years and is continuing. The case involving the retired trooper, Michael Frederiksen, is the first to go to trial.
For the second day in a row Tuesday, much of the testimony was spent describing Johnny Steven as a partner in an illegal gambling business that moved in recent years from a Hutchinson hotel, to the Waterwalk area in downtown Wichita, to an upstairs back-entrance loft on Douglas near Washington and to a room behind a bar on East Kellogg.
Johnny Steven is a businessman – Frederiksen described him as his insurance agent and the one who invited him to the private poker games. Johnny Steven, 39, is involved with his prominent brothers Brandon and Rodney Steven in a Wichita-based business empire. Brandon and Rodney Steven were wiretapped as part of the investigation. None of the Steven brothers has been charged.
When Frederiksen’s defense attorney asked an FBI agent on the witness stand Tuesday why Johnny Steven had not been charged with a crime, the agent responded, “Our investigation is ongoing.”
After deliberating for about an hour and a half Tuesday afternoon, the jury found Frederiksen guilty of one count of lying to the FBI.
U.S. District Court Judge Eric Melgren ruled Tuesday before the jury met that there was not enough evidence to support one of the two charges of lying. That charge dealt with the question of whether Frederiksen lied about the extent of texts and phone calls between him and Johnny Steven. Johnny Steven’s attorney, Kurt Kerns, said Tuesday night: “The only count my client was accused of being involved in was thrown out by the judge.” He also noted his client hasn’t been charged with a crime.
Frederiksen, 53, faces sentencing on July 30.
After a clerk announced the guilty verdict, Melgren said he had concerns that one of the prosecutors, Assistant U.S. Attorney Aaron Smith, might have misstated the law to the jury during his closing argument. Melgren asked attorneys on both sides to provide him legal arguments on that issue.
In a statement after the verdict, the U.S. Attorney’s Office said that during the FBI interview in 2017, “Frederiksen made false statements, downplaying his involvement in illegal poker and his relationship with the operator of the poker game.” He faces up to five years in federal prison and a fine up to $250,000, the office said.
The first witness to testify Tuesday was Daven Flax, a big man with a raspy voice who is known as "Smoke" because he operated smoke shops. Flax said he had an illegal gambling business that ran poker games in Wichita and the surrounding area for a number of years.
“I was known as a bookie,” he testified. Flax has pleaded guilty to operating an illegal gambling operation. He testified as part of his plea agreement.
Flax said his partnership with Johnny Steven in the illegal enterprise began probably four to five years ago, first with a poker game in a Hutchinson hotel. Then it moved to a hotel by the Waterwalk on Kellogg near downtown Wichita. Then to a loft with a large kitchen and room for two poker tables upstairs at 922 ½ E. Douglas, near Washington, in the Old Town entertainment district. Then — after an undercover officer showed up as part of the investigation in February 2014 – to a room behind a bar in a small strip center in the 5200 block of East Kellogg.
In each of the four locations, Flax said, he was in partnership with Johnny Steven. They split profits and expenses 50/50, texted or called players to let them know about games and provided snacks, food, alcohol, dealers and waitresses.
A $1,500 profit would be a “decent game,” $700 a “bad night” and $2,000 a “good night,” he testified.
The partners took what’s called a “rake,” a portion of each hand played. At the East Douglas spot, they had two dealers, who got a percentage. The waitresses got tips. The cook got cash.
Flax said that he and Johnny Steven weren’t present at every game. There were games generally on the same night almost every week of the year. Players had to be invited.
“Generally, we would have to know ‘em,” Flax said.
The list of people to invite grew over the years. They sometimes had security at the door, including at East Douglas, where “we had a robbery,” Flax said.
The security staff made sure the door remained locked. It made the players feel more comfortable, he said. If the Wednesday night games ran late, there were beds.
Flax said he knew Frederiksen, who was a state highway patrol trooper at the time of the games, as “Freddy,” who played at the various locations.
One night at the Douglas spot, Flax said, they suspected an undercover officer among the people at one table. The suspected undercover officer had a cellphone camera out and was making players uncomfortable.
Flax said he texted the other players one by one to cash out their chips and leave early that night. Frederiksen was at one of the two poker tables after paying $100 to buy in, Flax said. The undercover scare caused the operation to move, he said.
“I didn’t want to be busted. I didn’t want a game to get raided by the WPD,” Flax testified.
Some of the security officers were former cops. Flax said the person they suspected of being an undercover cop — it was an undercover Wichita police detective, according to testimony Monday — caused him to call a friend “who was WPD.”
Flax described to the friend what had happened and hoped “he’d tell me something.”
20 to 50 people
The second witness Tuesday, FBI agent Ryan Ross, described the gambling investigation as “broad in scope” and also testified that Johnny Steven was Flax’s partner in the illegal poker business.
The existence of the investigation became known publicly around Feb. 8, 2017, when four to six search warrants were executed at homes and other locations.
The investigation had also involved wiretaps in 2015. The FBI targeted five individuals whose electronic communications were intercepted.
Another FBI agent viewed video taken at one of the games with task force members; some were with the Highway Patrol, and they immediately recognized Frederiksen, Ross said.
“So it was a concern of ours that we had a known law enforcement officer participating.” It amounted to public corruption because officers are supposed to be enforcing the law, Ross testified.
The investigation included electronic records of 20 to 50 people. It involved phone calls and texts. Ross and another investigator went to Frederiksen’s home on Feb. 23, 2017, about two weeks after the search warrants, and when they asked him if he knew why they were contacting him, Frederiksen said he thought it was because of his “contacts with the Steven family,” Ross said.
Johnny Steven was his Allstate insurance agent, he told the investigators. He said Johnny Steven invited him to poker games, Ross recalled. At the trial, the federal prosecutors set up in front of jurors posters with close-up photos of Frederiksen and Johnny Steven with a list of instances of texts between them.
Frederiksen said he couldn’t afford to be in games where players spent thousands of dollars, Ross testified.
Investigators were concerned for the safety of the undercover officer if he was identified and worried how that might affect the investigation. The undercover officer had gone to the East Douglas game on Feb. 12, 2014, where Frederiksen had also been, according to video taken secretly by the undercover investigator.
The federal investigation didn’t focus on people playing poker at home; that is another possible crime for local or state authorities, Ross said.
The federal probe has focused on what Ross termed an illegal gambling business, where there are multiple players, money is exchanged and staff hired. Because the investigators thought Johnny Steven was one of the game organizers, they wanted to know the highway trooper’s contacts with him, Ross said.
Frederiksen made investigators do more work by not being honest with them, Ross said.
Marcos Montemayor, the former trooper’s defense attorney, later argued to the jury that his client didn’t lie about his involvement in the games, that, if anything, he couldn’t remember details that had happened three years before the FBI questioned him about them.
In the witness chair, Ross repeated that the federal investigation continues. He agreed with one of the prosecutors that investigators still have to keep information “under wraps.”
Frederiksen’s attorney brought out witnesses to tell the jury that he didn’t hide that he liked to play poker and that he was an honorable retired master trooper with 26 years of service who didn’t lie.
After he retired from the Highway Patrol, he became a security officer in the same federal courthouse where he was on trial.
Frederiksen also chose to testify Tuesday.
He described gambling at the Waterwalk location, where the players included businessmen and doctors. While others played higher stakes poker, he limited his play to $100 or $200, he said.
He said he admitted to investigators that he played in games after being invited by Johnny Steven. He said he told the truth to the FBI agent interviewing him.
As a trooper over the years, he said, “I’ve testified hundreds of times in court” and was never accused of lying.