11 People, 4 Firms Charged In Internet Gambling Sting
Tuesday, July 18, 2006
FORT WORTH, July 17 -- Federal officials charged 11 people, including the chief executive of an Internet gambling company, with conspiracy, racketeering and fraud in taking sports bets from U.S. residents.
BetonSports PLC and three other firms were also charged in the 22-count indictment, which was unsealed Monday in St. Louis. A federal judge there ordered BetonSports to stop accepting bets placed from within the United States.
The company's chief executive, David Carruthers, and four other defendants were arrested over the weekend. The Justice Department is seeking the forfeiture of $4.5 billion, cars and computers from the defendants.
Several other defendants live outside the United States, which will make them hard to apprehend, said U.S. Attorney Catherine L. Hanaway in St. Louis. "This is a tough crime to prosecute," she said.
Among those who live abroad is Gary Stephen Kaplan, the founder of BetonSports, which is incorporated in Britain and listed on the London stock exchange. Kaplan is a former New York-area bookie who moved his operations to the Caribbean after being arrested on gambling charges in New York in 1993, the Justice Department said.
Despite the move, the United States has remained Kaplan's main market, officials said. He now lives in Costa Rica and owns 15 percent of the company, according to the indictment. A warrant was issued for his arrest.
Officials said those arrested include Kaplan's brother, Neil Scott Kaplan, who handled purchasing for the company. He was arrested in Fort Pierce, Fla. Two other defendants were arrested in Miami and another in Philadelphia.
Carruthers was detained in Fort Worth while trying to make a connecting flight Sunday from Britain to Costa Rica. A federal magistrate ordered him held until a hearing on Friday.
Kevin Smith, a spokesman for BetonSports, said Carruthers and other company officials had no idea there was an indictment. "Certainly, had they told us, we would have been more than willing to negotiate with them and work on whatever these charges are," Smith said.
The other three companies named in the indictment handle promotional activity for BetonSports.
The indictment charges Kaplan with failing to pay excise taxes on more than $3.3 billion in U.S. wagers. Authorities also charged that Kaplan's group fraudulently claimed that Internet and phone wagering on sporting events was legal and licensed.
Last week, the House of Representatives passed a bill that would make it illegal for American banks and credit card issuers to make payments to online gambling sites.