Prominent Wichita businessman Brandon Steven on Tuesday pleaded guilty and was immediately sentenced to three years of probation for hiding gambling ledgers that implicated a Wichita bookie and others involved in illegal poker games around town.
Steven forfeited slightly more than $1 million that he made off of the games.
Details revealed in the case give a deeper look at how the illegal gambling that was the subject of a years-long FBI probe worked in Wichita. Steven has been under scrutiny for at least four years. He is among five men whose phones were wiretapped by the federal government in 2015 and among at least nine prosecuted for illegal gambling to date.
On Tuesday, he stood in a courtroom in the federal courthouse in downtown Wichita and admitted to hiding handwritten ledgers or other computerized records that detail gambling credits, earnings and the obligations of a gambling business run by 48-year-old bookie Daven “Smoke” Flax in an attempt to conceal Flax and others’ involvement.
The charge he pleaded guilty to — accessory after the fact to the unlawful transmission of wagering information — is a misdemeanor. A year in prison plus fines is the maximum sentence he could have received.
But Assistant United States Attorney Aaron Smith and Kansas City defense attorney J.R. Hobbs both urged federal Magistrate Judge Gwynne Birzer to be lenient and impose three years of supervised probation instead.
“He has taken this issue seriously,” Hobbs said of Steven as they stood at a podium in Birzer’s courtroom while Steven’s wife and other relatives watched from the gallery. He noted Steven’s involvement in the community, including time spent volunteering as a youth sports coach, and that Steven had support from his family.
“I can assure you that Mr. Steven will not disappoint the court,” Hobbs said.
Although Steven’s supervised probation is set to last for three years, he can ask the court to change it to unsupervised probation in 18 months. In addition to serving that time, he has to complete 200 hours of community service and agreed to forfeit $1,095,000 — money that represents the proceeds from his crime. Steven paid that amount to the government in full before Tuesday’s hearing, his attorney said.
After the hearing, Hobbs told reporters that he and Steven are “grateful that the court accepted a plea of guilty today.”
“We appreciate the discretion that was given by the government and the court in this matter. And we’re pleased that the matter is concluded and behind Mr. Steven,” Hobbs said outside of the courthouse.
He would not say how long he and Steven had been negotiating a plea deal with the government. Prosecutors on June 13 filed a charging document that provides limited details about Steven’s crime. Birzer unsealed the document, called an information, on Tuesday morning, according to court records.
Steven did not speak to media before or after Tuesday afternoon’s proceedings. In exchange for the plea, prosecutors agreed to not pursue any other charges against him related to this investigation.
Steven, 45, is well-known in the Wichita area. He is a partner with his brother Rodney Steven in health clubs, auto dealerships and other business ventures around town. In 2015, he tried unsuccessfully to build a $147 million casino in southeastern Kansas less than a mile from the Oklahoma and Missouri borders.
Another Steven brother, Johnny Steven, was implicated in the illegal gambling ring by a witness testifying during an ex-Kansas state trooper’s jury trial last year. Johnny Steven and Daven Flax allegedly owned the gambling operation together, according to the testimony. Johnny Steven has not been charged with any crime.
According to Brandon Steven’s plea agreement, Flax and others who arranged and ran illegal poker games around Wichita would tell participants about the games through text messages that also contained information about the payment and collection of money and credits. After the illegal games were over, Steven covered up the involvement of Flax and others by “hiding either handwritten ledgers or other computerized records detailing gambling credits, earnings and obligations of the gambling business,” the plea agreement says.
Steven “acted in cooperation” with Flax from December 2016 to Feb. 8, 2017, the plea agreement says.
Other men charged in connection with the years-long illegal gambling probe by the feds include:
▪ Danny Chapman, 69, a bookie, who pleaded guilty to operating an illegal gambling business and tax evasion on Jan. 12, 2018. He was sentenced April 25 to two years of probation and agreed to forfeit more than $1.6 million in the case along with cars, jewelry and other items.
▪Daven Flax, 48. Flax pleaded guilty to two counts of illegal gambling and one count of making a false tax statement after failing to pay federal income taxes on about $346,000 in winnings. He ran illegal poker games for an unidentified individual or individuals throughout Wichita. His job was to pay dealers, waitresses and caterers and to rent the businesses where the games were held. He also worked as a bookie for Chapman’s sports betting operation. He was sentenced to two years of probation and agreed to pay $117,000 in restitution.
▪ Michael Zajkowski, 51, a former Wichita police officer, who pleaded guilty to one count of concealing a felony for looking the other way for years while he knew about the illegal gambling ring. He used police resources to look up a license tag and identify an undercover vice officer who was investigating illegal poker games. His sentencing is set for Aug. 2 and both he and the U.S. Attorney’s Office recommend he serve a year of probation.
▪ Bruce Mackey, 47, of Goddard, a former Wichita police officer, who pleaded guilty to misprision of a felony for failing to report illegal poker games he knew about. He was accused of using police resources to identify an undercover vice officer who was investigating illegal poker games. He was originally charged with obstructing a criminal investigation. He was sentenced in October to a year of probation.
▪ Brock Wedman, 50, of St. Mary’s, who, along with an unindicted co-conspirator, was accused of running an illegal gambling business. He pleaded guilty to trying to keep Wichita police from investigating illegal poker games. He asked Zajkowski and Mackey to determine if an undercover vice officer had attended a Feb. 12, 2014, poker game. He also admitted to helping organize and recruit players. He was originally charged with obstruction of justice and lying to the FBI. His sentencing is scheduled for Aug. 1 and both parties recommend one year of probation.
▪ Michael Frederiksen, 54, of Derby, a former Highway Patrol trooper, who was convicted by a jury in May 2018 of making false statements to FBI agents during an investigation into illegal gambling in Wichita. Frederiksen was sentenced in January to one year of federal probation.
▪ Jack Oxler, 43, a former high school and college tennis coach, who was sentenced to probation for his role in illegal gambling in Wichita. Oxler had to forfeit $40,000 he made while operating and managing illegal poker games and a sports betting business from February 2014 to February 2017, according to federal court records. He pleaded guilty to two counts of illegal gambling in February 2018 shortly after he was charged.
▪ Daniel Dreese, 66, who was sentenced to two counts of making false statements on income tax returns. He admitted to making hundreds of thousands of dollars from illegal bookmaking including receiving $89,078 in 2011 and $136,985 in 2012. He also didn’t report $383,684 in income in 2010, according to court records.