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Quit board had gambling debt

AUSTIN — A Houston investor who resigned today as the head of the board overseeing Texas Teacher Retirement System investments had a $110,000 judgment against him from Bellagio Inc. in Las Vegas for an unpaid gambling debt.

Court records show the casino received a default judgment against James H. Lee of Houston last June after he failed to respond to the lawsuit. Lee said he only became aware of the lawsuit in December when the Bellagio hired a Dallas lawyer to collect the debt.

Jeff Hunt, a spokesman for Lee, said Lee and the Bellagio reached a financial settlement in December. Hunt said Lee's resignation was not related to the lawsuit and occurred because he is entering a new business venture in Houston.

Hunt said Gov. Rick Perry will name former Dallas school Superintendent Linus Wright to replace Lee as head of the retirement system board.

The Bellagio lawsuit filed in Las Vegas claims Lee gave the casino three checks on Oct. 8, 2005, with a total value of $130,000.

The Bellagio dated the checks on May 25, 2006 and presented them for payment to Wells Fargo Bank and were returned stamped "NSF," the lawsuit says. Copies of the checks filed with the lawsuit show they were on an account at a 1000 Louisiana Street branch of the bank in Houston.

The lawsuit states that prior to the action being filed Lee paid the casino $20,000 toward his debt, leaving a balance of $110,000.

The lawsuit was filed in November 2007. Las Vegas court documents indicate service was made by certified mail to Lee's Houston home.

Nevada District Judge Timmothy Williams last June entered a default judgment against Lee for $110,000 plus 18 percent interest per year, with interest starting on Oct. 8, 2005. The court order said Lee had failed to respond to the lawsuit.

Lee briefly spoke with the Houston Chronicle before turning questions over to Hunt, who serves as a spokesman both for Lee and the TRS board.

Hunt said Lee had believed the earlier payment he made to the Bellagio had settled his debt with the casino.

Hunt said Lee and his family moved to New Jersey to work on Rudy Guiliani's presidential campaign so were not at their Houston home when service from Nevada was made multiple times. Hunt said Lee was not aware of the lawsuit or the default judgment until an attempt was made to collect the debt in December.

Lee made a payment to Bellagio to settle the debt and received a letter from the casino regretting that the issue had ever become public, Hunt said.

Bellagio general counsel Bruce Aguilera of Las Vegas, who filed the lawsuit, did not immediately respond to a request for comment.

Hunt said Lee is leaving the TRS board because he believes its investment policies are now well positioned and he has a new business venture in Houston.

Hunt noted that the gambling debt occurred prior to Perry appointing Lee to the TRS board in February 2008. "Gambling's not illegal," Hunt said.

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