PeterSidorkiewicz
HFWF Tourney Undisputed Champion
It's time for the Mohegan Sun to put Melnyk's bounced check up on the wall of their casino.
News Article: Eugene Melnyk lawsuits:too many to count...
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The Lewler
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I fully acknowledge different instruments are likely in play with the types of wealth and accounts, bank drafts for us plebes usually like serial numbers on them and then transit/branch/ account numbers at the bottom like a regular cheque, do they not?
I knew from the outset he couldn't possibly have been receiving "traditional" bank drafts at that time of night, I'll be curious to learn if they were in fact bank drafts or rather some kind of different cheque sent electronically from a private account.
This looks nothing like any bank draft I've ever seen. I've seen multiple drafts from different Canadian banks, and they're often written by hand and have carbon copies. That said, I've used them for buying cars, I'm not a billion(million?)aire using 6 figure bank drafts. I know someone who worked at TD in the past, I'll see if they recognize the format.
YouGotAStuGoing
Registered User
As far as I know, a TD Bank draft looks more like this:
That's not me necessarily saying the image in the suit is NOT a draft. Just that I've never seen one like that.
BonkTastic
ಠ_ಠ
Yeah... I'm looking at them right now.
This is:
1) a credit application by Melnyk in 2004, when he was still CEO at Biovail (he wouldn't step down in that capacity until 2007, famously "retiring" the day after he was accused by the Securities and Exchange Commission of breaching securities laws).
Possible concerns here: if his 2004 credit application was in his role as CEO of Biovail, it's possible that the line of credit no longer applied in 2017 when he no longer held that position, and attempted to use his old marker? Admittedly though, this seems far fetched, but the credit application being almost 15 years before the credit withdrawal MIGHT play some issue? I don't know, I'm clearly just openly guessing at this one.
2) The language of conditions in the 2004 credit application states:
"I understand that if the MTGA provides me with chips or tokens in exchange for a check or marker, the chips or tokens are the equivalent of cash, and I understand that a marker signed by me may be negotiated by MTGA in the same manner as a check. I understand that if my check or marker is dishonoured by a financial institution because of insufficient funds in the account, because the account was closed, because of a stop payment order or for any other reason, I may be exposed to criminal penalties in addition to any civil remedies that the MTGA may have against me".
This seems to be the crux of the issue. These aren't bank drafts as we understand them to be. These are cheques. These don't look like any Bank Draft I've ever seen (which I admit isn't a huge amount, so I'll very clearly defer to expertise on this one, I'm more voicing skepticism on the whole "bank draft" issue here - but will gladly amend my view if proven that my skepticism is unwarranted).
BonHoonLayneCornell
Registered User
I see a few TD drafts a week through my work and that is definitely a different format than the typical TD Drafts for us poor heathens. Drafts much bigger than the ones Melnyk issued still come through on their typical format, but that's not coming from billionaires and their special wealth management privileges.
Rand0m
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- Oct 2, 2011
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I briefly looked at the court documents. So he had to apply for a line of credit since he didn’t have $1M in actual cash and since you can’t really cash cheques/drafts “instantly”. It seems like these checks/drafts were then written whenever he wanted to get more chips? So Monday morning, when the casino attempts to cash these cheques/drafts, there’s insufficient funds? Which would make it appear that these are not traditional drafts.
BonHoonLayneCornell
Registered User
Yes, this is the same format every TD draft our office has received in all my time here.As far as I know, a TD Bank draft looks more like this:
That's not me necessarily saying the image in the suit is NOT a draft. Just that I've never seen one like that.
Thanks to those who responded re: what a draft looks like. Going to be interesting to see how this plays out. However, it should just play out with Melnyk wiring the 900k and settling the issue.
Regarding the first point, I would assume so. The second part is where it gets interesting.
I briefly reviewed the complaint and the exhibits. What seems to be the case is that:
1) Melynk applied for a $1,000,000 casino credit account in 2004 (ty Micklebot) (see exhibit 1 in the case details linked above)
The casino credit account is basically a credit line payable through a chequing account. If you're a frequent big money gambler, you don't want to have to be running to the ATM while you're playing or bringing in wads of cash or cheques every time. So, what you do is apply for the casino credit account and they'll advance you funds while you're playing and then you pay the casino back later. Depending upon how much you have outstanding with the casino you have different amounts of time to pay the money back (the Mohegan Sun website states that amounts over $5000 must be paid back within 45 calendar days). More info on the Mohegan Sun Credit program here: Casino Credit Form | Mohegan Sun
2) Sometime in 2017, Melynk must have taken casino credit while gambling. Given the amounts, he was required to pay this money back within 45 days. The actual time of day that the drafts were issued probably doesn't correlate to when he was gambling because we now know that he had 45 days to pay the money back (and let's be honest, we all know Melynk isn't paying anything early). What it seems to me is that the 45 day time limit probably expired on March 19, 2017, which is why he was issuing the drafts late at night. He needed to beat the deadline or risk having his casino credit privileges revoked.
3) The "draft" issue is tripping a lot of people up. The complaint references "drafts (as defined in the Connecticut General Statutes s 42a-3-104). What this means is that they are using "draft" as a term of art (i.e. it has a specific meaning as defined in the statute). This meaning may or may not correlate to our common understanding of what a "bank draft" is.
The precise language of the statute is available here: 2012 Connecticut General Statutes :: Title 42a - Uniform Commercial Code :: Article 3 - Negotiable Instruments :: Section 42a-3-104 - Negotiable instrument.
The relevant language is:
(e) An instrument is a “note” if it is a promise and is a “draft” if it is an order. If an instrument falls within the definition of both “note” and “draft”, a person entitled to enforce the instrument may treat it as either.
(f) “Check” means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier’s check or teller’s check. An instrument may be a check even though it is described on its face by another term, such as “money order”.
(g) “Cashier’s check” means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.
(h) “Teller’s check” means a draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank.
(i) “Traveler’s check” means an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term “traveler’s check” or by a substantially similar term, and (iv) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.
(j) “Certificate of deposit” means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.
So, as we can see, multiple different types of instruments are called "drafts" under Connecticut law.
4) The terms and conditions of the credit account specifically state that the Casino can go after Meylnk. The relevant language:
I understand that if my check or marker is dishonored by a financial institution because of insufficient funds in the account, because the account was closed, because of a stop payment order or for any other reason, I may be exposed to criminal penalties in addition to any civil remedies that the MTGA may have against me.
tl;dr: Melynk had a credit account at the casino. He need to pay the $900,00 by a certain deadline or risk having his credit account revoked. Under Connecticut law "drafts" can, but don't always mean "bank drafts" within the common understanding of the word. The "drafts" Meylnk issued were dishonoured by the bank for reasons that are as of right now unknown, and the Casino wants it's money from Meylnk.
1) Melynk applied for a $1,000,000 casino credit account in 2004 (ty Micklebot) (see exhibit 1 in the case details linked above)
The casino credit account is basically a credit line payable through a chequing account. If you're a frequent big money gambler, you don't want to have to be running to the ATM while you're playing or bringing in wads of cash or cheques every time. So, what you do is apply for the casino credit account and they'll advance you funds while you're playing and then you pay the casino back later. Depending upon how much you have outstanding with the casino you have different amounts of time to pay the money back (the Mohegan Sun website states that amounts over $5000 must be paid back within 45 calendar days). More info on the Mohegan Sun Credit program here: Casino Credit Form | Mohegan Sun
2) Sometime in 2017, Melynk must have taken casino credit while gambling. Given the amounts, he was required to pay this money back within 45 days. The actual time of day that the drafts were issued probably doesn't correlate to when he was gambling because we now know that he had 45 days to pay the money back (and let's be honest, we all know Melynk isn't paying anything early). What it seems to me is that the 45 day time limit probably expired on March 19, 2017, which is why he was issuing the drafts late at night. He needed to beat the deadline or risk having his casino credit privileges revoked.
3) The "draft" issue is tripping a lot of people up. The complaint references "drafts (as defined in the Connecticut General Statutes s 42a-3-104). What this means is that they are using "draft" as a term of art (i.e. it has a specific meaning as defined in the statute). This meaning may or may not correlate to our common understanding of what a "bank draft" is.
The precise language of the statute is available here: 2012 Connecticut General Statutes :: Title 42a - Uniform Commercial Code :: Article 3 - Negotiable Instruments :: Section 42a-3-104 - Negotiable instrument.
The relevant language is:
(e) An instrument is a “note” if it is a promise and is a “draft” if it is an order. If an instrument falls within the definition of both “note” and “draft”, a person entitled to enforce the instrument may treat it as either.
(f) “Check” means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier’s check or teller’s check. An instrument may be a check even though it is described on its face by another term, such as “money order”.
(g) “Cashier’s check” means a draft with respect to which the drawer and drawee are the same bank or branches of the same bank.
(h) “Teller’s check” means a draft drawn by a bank (i) on another bank, or (ii) payable at or through a bank.
(i) “Traveler’s check” means an instrument that (i) is payable on demand, (ii) is drawn on or payable at or through a bank, (iii) is designated by the term “traveler’s check” or by a substantially similar term, and (iv) requires, as a condition to payment, a countersignature by a person whose specimen signature appears on the instrument.
(j) “Certificate of deposit” means an instrument containing an acknowledgment by a bank that a sum of money has been received by the bank and a promise by the bank to repay the sum of money. A certificate of deposit is a note of the bank.
So, as we can see, multiple different types of instruments are called "drafts" under Connecticut law.
4) The terms and conditions of the credit account specifically state that the Casino can go after Meylnk. The relevant language:
I understand that if my check or marker is dishonored by a financial institution because of insufficient funds in the account, because the account was closed, because of a stop payment order or for any other reason, I may be exposed to criminal penalties in addition to any civil remedies that the MTGA may have against me.
tl;dr: Melynk had a credit account at the casino. He need to pay the $900,00 by a certain deadline or risk having his credit account revoked. Under Connecticut law "drafts" can, but don't always mean "bank drafts" within the common understanding of the word. The "drafts" Meylnk issued were dishonoured by the bank for reasons that are as of right now unknown, and the Casino wants it's money from Meylnk.
Last edited:
Micklebot
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The one part that stands out to me is the "drafts", for lack of a better term, don't have a line for the signature of a bank employee. The signature appears to be that of the Euge himself, which doesn't make a lot of sense if we are talking about a bank drafts where the bank is the one guaranteeing the amount.
DaveMatthew
Bring in Peter
Great and super helpful post!
As you clarified, there's no reason to be hung up on the term "bank draft". Melnyk owed the casino 900k, and failed to pay. That's all that matters.
Based on the exhibits, it looks like he wrote cheques that bounced.
Must just be a simple misunderstanding that he didn't clear up in 2+ years!
Yep, big red flag. Another one is that the "drafts" appear to have Melnyk's address in the top left corner (i.e. like a personal cheque). Actual drafts like the TD example that was posted just have the issuing bank's info as they have already debited the payer's account and are now holding the money in escrow until the draft is deposited.
Micklebot
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One minor quibble, I think he applied in 2004, he listed his title as CEO of Biovale on the application and had already left Biovale by 2012 which leads me to believe the date format used was Month-Day-Year which I understand is the norm in the states.
Good catch, thanks. edited the OP.
That's what we don't know right now. He could have closed the account, NSF, stop payment, or something else could have happened.
You're almost certainly right. Anyone can print or write a cheque on any piece of paper, as long as it includes the payee's name, the payor's signature, the amount, and the branch, transit and account numbers of the bank that the cheque is being drawn on. (Though it is up to the depositing bank as to whether they'll accept the cheque without any of the usual security features like watermarks etc.) Actual bank drafts, as has been discussed, are a completely different matter.
Sens of Anarchy
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The TD bank is at King and Bay; Toronto
000410432 Toronto-Dominion Bank (TD Canada Trust), PB King & Bay 1 Routing Number, Transit Number, MICR | Banks Canada
The Transit number looks like stamp. The cheques do look suspiciously vanilla... No bank info or bank address, the transit number added.. We don't know about the account number ... The documents themselves may not be acceptable to the bank
000410432 Toronto-Dominion Bank (TD Canada Trust), PB King & Bay 1 Routing Number, Transit Number, MICR | Banks Canada
The Transit number looks like stamp. The cheques do look suspiciously vanilla... No bank info or bank address, the transit number added.. We don't know about the account number ... The documents themselves may not be acceptable to the bank
The Lewler
GOAT BUDGET AINEC
Sens of Anarchy
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https://www.tsn.ca/radio/ottawa-1200/the-drive-september-16-2019-hour-1-1.1366534
discussed on the drive around the 8 minute mark plus or minus a few seconds. Briefly mentioned. They then go on to have a back and forth on Spartacat being known as the Lion early on. Compelling.
His Lawyer has apparently responded saying it will be dealt with swiftly
BonkTastic
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I'm surprised it even had to get to this point, if I'm being honest.
Like... This is a pretty extreme measure to have to take.
Gil Gunderson
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Sens of Anarchy
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It would be funnier if those "cheques" were completely hand printed with some hand drawn art work. Reasonably straight lines to endorse. I would be surprised if he wasn't questioned on those cheques when he handed them over.
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