A secret audio recording of Lexington town councilman Danny Frazier gives a detailed look inside an underground video poker operation working inside Lexington County. Frazier brags about his ability to operate illegal video poker sweepstakes businesses within Lexington County. A WIS investigation uncovers Frazier's political connections and whether those connections are allowing him to continue doing business.
We obtained the recording from a source who secretly recorded a conversation with Frazier. The source posed as a businessman, interested in getting into the illegal video poker operation inside Lexington County. The source went undercover after fearing Lexington County law enforcement was purposefully ignoring and protecting Frazier's operations. The recording links Frazier to at least two separate sweepstakes businesses, both near West Columbia.
The people who made the recordings tell WIS they have turned them over to state and federal authorities.
Frazier admitted to the recording in an emailed statement to WIS that came down late Tuesday night, but denies any involvement in any illegal video poker business. Frazier claimed he didn't "recollect" any of the statements on the recording when WIS confronted him with the recording at a council meeting last week.
In the recording, Frazier tells the informant, "I do their dirty work for their [expletive]. I got [expletive] to do it," referring to politicians he said he has connections to inside the State House. With those connections, Frazier tells the informant that he's able to continue operating illegal poker machines because he knows where to put them where Lexington County law enforcement won't touch them.
"It'll be their machines and you'll get a percentage, that way you don't have no big investment," Frazier tells the informant. The business arrangement Frazier described would allow the informant to collect a percentage of the profit, but the machine would belong to a supplier.
In the recording, Frazier tells the informant his supplier is Brett Blanks, who is the registered agent of East Coast Vending and Universal Vending, both Lexington County Limited Liability Corporations.
Frazier describes the venture as a low risk, high reward opportunity and a way to make a quick profit.
Frazier tells the informant he's racking up profits at his Gator's One Stop Party Shop in West Columbia "In the last seven days, the take for that store was $3900," Frazier said. "I'm on a percentage where I got it at 60/40." With that kind of cash on site, Frazier tells the informant to make sure he has security cameras and, "You'll want to empty the machines every night."
Frazier tells the informant he's got two locations with multiple illegal gambling machines in rooms tucked away from the eyes of law enforcement. One is one block away from the West Columbia Police Department.
On the tape, Frazier makes a call to a state senator concerning a video poker bill, then brags to the informant about his bravery, "All them son-of-a-[expletive] that stay pretty and clean up there. The only reason they stay pretty and clean is because I do their dirty work for their [expletive]. I got [expletive] to do it and the rest of them...they scared."
Frazier, along with holding an elected office on Lexington town council, is also on the payroll with the Lexington County Sheriff's Department.
"He's still with the department, but as you can imagine, once these allegations started coming forth from some of the media outlets, I became concerned and I started an internal investigation," Lexington County Sheriff James Metts told WIS.
Frazier started working for Metts three months ago as a "business liaison. Metts said the position is part-time and that Frazier did not hold any commission with the department. Metts sent the State Law Enforcement Division and the Federal Bureau of Investigation letters, asking them to investigate the allegations against Frazier. Metts said he hadn't heard any of the recording involving Frazier.
Given Frazier's close ties to the sheriff, we investigated whether Metts is connected.
Barr: "Are you in any way connected to any type of gambling operation that Mr. Frazier may be--and an investigation may find that he may be connected to?" Metts: "No, I am not involved in any kind of illegal activity in any way, shape or form."
But, the sheriff's campaign records show, since October Metts took in at least $6200 from people connected to Danny Frazier's gambling operation. Below is a list of contributors and the amounts they gave:
East Coast Vending, LLC: $500
Magic Minutes, LLC: $1,000
Universal Vending, LLC: $1,000
Universal Music, LLC: $1500
Universal Vending of NC, LLC: $1,000
Charles E. Bishop: $1,000
Danny Frazier: $500
Thursday night Metts told WIS he returned $5,500 in campaign donations from the gambling operations.
East Coast, Universal Music, and Universal Vending are all LLCs registered in Brett Blanks' name, according to the SC Secretary of State's records. Frazier, on the recording, identifies Blanks as his supplier of the illegal video poker machines. Blanks and the companies we were able to connect to him through our investigation gave Metts a total of $4,000 for the sheriff's 2012 re-election bid.
Another $1,000 contribution came from Magic Minutes, LLC. The company is a sweepstakes gambling machine business, owned by former 5th Circuit Solicitor investigator, LW Flynn. Flynn's machines offer customers the purchase of phone minutes, then allows them to play several poker games for cash payouts. Flynn's machines have been deemed illegal gambling devices by the SC Attorney General and by multiple judges across the state.
"Neither one of those rang a bell to me. Neither one of them says that they are illegal gambling outlets in this state," Metts said when questioned about accepting the contributions.
The sheriff said he was too busy meeting and greeting voters to pay attention to who gave to his campaign, although the contributions were maximum contributions. "Very rarely do I look at the checks," Metts said, "I do have access to who contributed to the campaign through the computer, but really and truly, I don't go back and look at that."
"If you held a shotgun to my head right now and told me you were going to pull the trigger unless I told you everybody who contributed to my campaign, you'd just have to kill me," Metts said.
Several times during the interview, Metts denied any participation in or knowledge of any of the illegal video poker businesses in his county. "I know people say, in something like that breeds corruption, but I can tell you in no uncertain terms I am not a part of any Lexington County ring, I am not part of any illegal gambling. I don't own. I don't receive. I'm not involved. I'm not protecting anybody. As a matter of fact, [it's] quite the opposite. I'll put their [expletive] in jail."
Lexington County Senator Jake Knotts also accepted thousands of dollars from the same group connected to Metts and Frazier. SC Ethics Commission records show that Knotts accepted at least $7,000 from the businesses connected to the Frazier operation. Knotts' campaign disclosure reports show the following contributions:
East Coast Vending, LLC: $1000
Universal Music, LLC: $1000
Universal Vending of NC, LLC: $1,000
LW Flynn: $1,500
Kathy Flynn: $1,000
LW Flynn Enterprises: $500
Lir P. Derieg: $1000
LW and Kathy Flynn are registered agents for Magic Minutes, LLC, the same group who contributed to Sheriff Metts' campaign. LW Flynn Enterprises is also owned by the Flynn family connected to the Magic Minutes business. Knotts accepted $3,000 total from the Flynns and their businesses.
Lir P. Derieg is a former assistant solicitor in the Richland/Kershaw County solicitor's office. Derieg is now the hired attorney for Magic Minutes, LLC and the Flynns. Derieg has argued multiple seizure cases involving the Flynn's machines and has lost the cases prosecuted by SLED and the Attorney General's Office.
"Have you offered any protection or made any phone calls or made any statements to anybody who could potentially prosecute those businesses as your role as a state senator?" Barr asked Knotts, "No," replied the senator.
Knotts admits Danny Frazier is a close friend whom he's known for years, but denies any knowledge of protection for Frazier to continue to operate the illegal sweepstakes machines. "Do you have any involvement in what these tapes show that Danny Frazier may be involved in?" Barr asked. "None whatsoever," Knotts replied.
"I've got contributions when I first ran, every time I've ever run and I don't back away from it," Knotts said of accepting campaign contributions from the video poker industry.
"If there's any more money out there that any of those people want to send me, send it to me," said Knotts. "I could take money from the devil and make it do God's will."
The sweepstakes businesses are all over Lexington County. Many are operating very near to law enforcement.
In less than a quarter-mile from the Lexington County Sheriff's Department, we found three machines inside Crouch's Party Shop on Highway 378. The business has a Jake Knotts campaign sign out front.
The machines are at the back of the store, sitting against a wall behind the store's beer coolers. When WIS visited the store last week, all three machines were open for business and two men were sitting at bar stools in front of the machines, sliding money into the machines and playing card games on them.
A worker inside Crouch's liquor store told me the business is owned by Jody Crouch. We left a written message for Crouch with the clerk, but our calls have not been returned.
It's the same story a quarter-mile closer to the sheriff's office. We found three more phone minute machines inside the Rite Stop convenience store on Highway One. Two machines were marked with a label showing the machines belonged to East Coast Vending, the other machine marked with a Universal Vending label. Both businesses belong to Brett Blanks, and all contributors to sheriff Metts, and Senator Knotts.
"If I told you there were six machines in two stores less than a mile from here bearing the name of East Coast Vending and Universal Vending, would that surprise you?" Barr asked Sheriff Metts. "No, it would not," Metts replied.
Metts went on to explain that the machines are all over the county and claims the state's video poker law isn't clear enough to determine the machines are illegal.
Metts stressed the reason machines are in stores inside his county isn't because he's allowing it. "Our officers are not trained to be able to recognize these machines and of course, we're like everybody else, we don't have the manpower to go in and constantly try to catch these people gambling and paying off."
Metts said he doesn't plan on giving up any of the poker business campaign money. "Let me set the record straight. I don't intend on giving any money back unless whoever gave this money to me, or whatever company gave this money is proven to be involved in illegal activities."
As for Danny Frazier, Metts said he has not suspended him and won't until he has evidence that Frazier has committed a crimes. When asked whether any type of law enforcement investigation is underway, "It would not be appropriate to comment on that at this time," SLED Chief Mark Keel told WIS.
Copyright 2012 WIS. All rights reserved.