The state profits when gamblers embezzle

Attorney David Falvey of Groton has an interesting legal theory about people who embezzle money to gamble at the casinos.

And Falvey has had good reason to give it a lot of thought, since he's a victim, having lost $200,000 to embezzlement by a bookkeeper at his law firm with a gambling habit.

These gambling embezzlers, Falvey suggests, are de facto agents for the casinos, stealing money for their benefit. And, by extension, because Connecticut benefits by the gambling revenues, the embezzlers are also agents for the state.

Since Connecticut is one of the primary beneficiaries of embezzled money, Falvey suggests, isn't it time for the state to create a fund to reimburse victims of embezzlement?

After all, you don't let pawn shops keep stolen merchandise, right?

Falvey, energized by a new state-commissioned report which says the rate of embezzlement here has increased at a rate of 10 times the national average, is looking for other embezzlement victims.

He'd like to get a group together to lobby the legislature to set up a fund to compensate embezzlement victims the same way mugging victims and victims of unscrupulous contractors are compensated.

Since the new gambling report indicates there were 214 embezzlement arrests in just 2007, he shouldn't have too much trouble finding other victims.

Falvey realizes it will be an uphill battle while the state remains in such financial distress, but he believes the state has a moral obligation, if not a legal one.

"The point is that the State of Connecticut is not regulating this and not looking at its social responsibility for being a recipient of embezzled money," he said.

He has a good point.

Falvey also correctly lays blame on the casinos for allowing problem gamblers to wager recklessly.

To use the analogy of a bartender who shuts someone off when he appears to be too intoxicated, the casinos are allowing problem gamblers to continue to play even when they are the equivalent of falling-down drunk.

The casinos, in fact, probably have a better window on who's overspending at the tables and slots than who's had too much to drink.

"They track with great statistical accuracy who is gambling and spending great amounts of money," Falvey said.

Of course, convincing the casinos to turn away their best customers would be a bit like getting McDonald's to stop serving overweight people.

It's not likely to happen anytime soon.

Falvey's field of legal expertise is bankruptcy, and he says a lot of bankruptcies around here are related to problem gambling.

And yet despite his own close-hand experience with the consequences of compulsive gambling, Falvey is a realist when it comes to the casinos, noting that the jobs they created saved the economy from a meltdown during the steep cuts at Electric Boat in the early 1990s.

"I see them as both a curse and a blessing," he said.

And the state, he might have added, needs to take more responsibility for the curse as it continues to count its own blessings.

This is the opinion of David Collins.

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