LAS VEGAS -- It has been called the largest sports gambling operation in U.S. history and its leader faces a potential maximum prison sentence of 432 years. But the 19 people indicted in January at U.S. District Court in Las Vegas are not charged with bookmaking. They are charged with sports gambling.

Together, they are known as the Computer Group because they used computer technology to calculate odds, make bets of up to $600,000 a day and earn millions of dollars in profits, according to federal authorities. Their case is highly unusual because the federal government rarely prosecutes sports bettors.

And it is unusual for another reason: Some members of the group admit they at times placed bets across state lines with illegal bookmakers but contend their actions do not violate any laws. Illegal bookmaking is a crime, they say, but placing a sports bet is not, even when it's done by telephoning illegal bookies outside Nevada, the only state where bookmaking operations can be licensed.

The defendants, led by Ivan Mindlin, have pleaded not guilty to charges of conspiracy, interstate transmission of betting information and use of interstate facilities in the aid of racketeering. The indictment came only two weeks before the statute of limitations would have expired in the FBI's five-year investigation -- one in which 45 homes and offices were raided, more than 10,000 telephone conversations were wiretapped and 89 boxes of evidence were seized.

One Computer Group member contends the government has wasted substantial resources investigating and prosecuting mere bettors. "Our national priority should be drugs -- not sports bettors," said Billy Walters, who directed Mindlin's betting operation. "Is it in the national interest for our government to spend millions of dollars of manpower to go after 19 people who are betting on ballgames?"

Federal officials declined to discuss details of the case, which is scheduled for trial in November. However, a picture of the Computer Group emerges from court documents and interviews with key Mindlin associates.

All the Way to Baltimore

Everyone agrees the Computer Group was enormously successful. An FBI informant said the group made a $25 million profit in one year, according to a statement filed in federal court here by Assistant U.S. Attorney Jane Hawkins. Walters said the profits, although considerable, were far less. During the college football season, he said, the group bet up to $1.5 million each week and won an average of $30,000.

Early on, the FBI thought it had uncovered a major bookmaking ring, according to court documents. After raids before the 1985 Super Bowl in 22 cities -- from Las Vegas to Baltimore -- the Computer Group's activities were examined by several federal grand juries. Then the case apparently was shelved.

The surprise indictment, issued Jan. 4 this year, does not directly allege bookmaking. Walters said he is baffled by the charge that members of the Computer Group transmitted betting information across state lines.

"They're saying we disseminated gambling information across interstate lines. We certainly did. There's no question about it," Walters said. " . . . If we broke the law we were doing what every newspaper and TV network in the United States is doing. I mean, the {betting} line is passed out {by the media} on a daily basis."

It is clear the government does not consider Mindlin and his associates ordinary bettors. According to statements filed in federal court by Hawkins, a grand jury witness has testified that Mindlin deposited "millions of dollars" in Swiss bank accounts, using ficticious names. Mindlin's lawyer, Morris Goldings of Boston, called that testimony "an absolute lie and poppycock." Mindlin declined through Goldings to be interviewed for this story.

"We contend what these fellows were doing was winning money from illegal bookmakers," Goldings said of the Computer Group. "The victims in this case, if you can call them that, were the illegal bookmakers who were foolish enough to bet with these fellows, as well as the legal bookmakers, who lost some during this period."

It's widely believed in gambling circles that Computer Group insiders made their point spreads and power ratings available to prominent Nevada citizens.

One recipient of this information is Irwin Molasky, a real estate investor, former film studio executive and University of Nevada-Las Vegas basketball booster. According to his lawyer, Stan Hunterton, Molasky bet in partnership with Mindlin from 1982 to 1984 on college football, pro football and baseball games. Molasky is not charged in this case and Hunterton said his client did nothing illegal.

"Mindlin selected teams for Mr. Molasky to bet on and made the bets for Mr. Molasky," Hunterton said. "It was never a question of {Molasky saying} yes or no. He just took Mindlin's judgment. Mindlin even decided {the amount to bet} because that's an important part of it. At various point spreads one would want to risk less money or more money."

Hunterton, a former federal prosecutor, said Molasky presumed Mindlin was placing their bets at legal sports books. "Mr. Molasky won more money than he lost," Hunterton said, "but wouldn't have been involved with this had he had any idea there was anything wrong with it." Molasky testified before the federal grand jury here that indicted Mindlin and his associates.

Another recipient of Computer Group information was Dominic Spinale, who is identified in an FBI affidavit as an associate of organized crime family figures in Boston and Chicago. According to transcripts of court-authorized telephone wiretaps, Spinale received betting information from Walters's top assistant, Glen Walker, and passed it on to Tony Spilotro, the late overseer of Chicago organized crime operations in Las Vegas.

Mindlin said he once asked Spinale to open a telephone betting account on his behalf at the Stardust Hotel here, according to an FBI affidavit. Goldings declined to comment on the alleged betting account. He characterized Mindlin's relationship with Spinale as "acquaintanceship, not friendship particularly."

In the Beginning

Mindlin is a former orthopedic surgeon who was educated at McGill University in Toronto, where he majored in math, physics and physiology, and the University of Manitoba, where he received a medical degree in 1955.

After opening a surgical practice here in 1971, Mindlin began using computer technology to analyze everything from college basketball odds to the commodity and futures markets. In 1982, after an automobile accident forced him to give up surgery, Mindlin devoted more of his energies to sports gambling.

By then, Mindlin's system for beating the oddsmakers was the talk of the Las Vegas betting world. According to various sources, his system operated as follows:

Michael Kent, a computer whiz who is not charged in this case, would devise a point spread and power rating to determine the amount of money, if any, to be wagered on each game. Usually, no bet would be made unless there was, at minimum, a 1 1/2-point difference between Kent's line and the bookmaker's line. This difference was necessary to gain an edge over the bookie, who charges a commission for handling each bet.

Mindlin hired Walters, a former bookmaker in Kentucky, to place his bets for a percentage of the profits. Walters, in turn, hired assistants, including his wife, Susan, and Walker. Using automatic-dial telephones Walters said they placed action with as many as 25 bookies each week.

Speed was essential because odds can change rapidly, depending on the amount of money received by bookmakers on both sides of a game. "I could call maybe ten {bookmakers} in a minute and a half," Walters said.

Walker said he unwittingly bet between $50,000 and $70,000 a week with a bookmaking operation that was part of an Internal Revenue Service sting. The botched undercover operation lost $600,000, produced no major arrests and nearly resulted in the deaths of several IRS agents. The sting is being investigated by the House Subcommittee on Commerce, Consumer and Monetary Affairs.

Networking

Since legal bookmakers in Nevada often limit the size of wagers, Computer Group bets also were placed with illegal bookies in other states, including Maryland, according to the indictment. To book even more action, Walters enlisted the services of "beards" -- agents who bet on the group's behalf but concealed its identity.

"I had different deals with different people," Walters said. "I gave them the games, they went out and bet them, and they gave me part of the money they bet. That was the basic deal. I furnished information."

Some of the beards enlisted other beards to place additional bets. So the "computer" action grew. "Let's say {the Computer Group} bet 40,000 dollars on a game," Walters said. "By the time the beards and their followers and friends got done betting on a game, there's half-a-million dollars bet on that game."

Among the 45 locations targeted in the FBI's 1985 raid were Mindlin's vacation condominium in Vail, Colo., and Walters's leased house in Fort Lauderdale, Fla.

"They came into our house, fully armed," Walters said. "My 65-year-old mother-in-law was in the bedroom asleep. They ran in the room on her, drew a gun on her, scared her half to death."

Walters said the FBI seized $430,000 of his money, making it impossible to pay income taxes for two years. When the money was returned, Walters said he owed the IRS an additional $125,000 in interest and late-filing penalities.

The day before the indictments were returned in January, Walters said he and his wife attempted to surrender to federal authorities. "My attorney called the strike force attorney three times trying to make arrangements," Walters said. "The guy wouldn't return my attorney's phone calls."

Early the next morning, Walters said three FBI agents came to his Las Vegas home, handcuffed him and his wife, took them to FBI headquarters and then to the federal courthouse, where they were placed in leg irons.

At U.S. District Court here, Walters's lawyer, Oscar Goodman, later filed a "notice of outrage" that addressed the government's general conduct in the case. "Prosecutors have dispatched their constables to literally shackle and lead legitimate citizens from their beds to drag them to courthouses through the land," Goodman stated. " . . . No wonder, with a stormtrooper mind set such as this, the 'war on drugs' is being lost."

The 19 defendants each was freed on his own recognizance.

"As long as there's something to gamble, guys are going to gamble," said Walker. "If they start putting guys that bet on sports in jail, then they're going to have to cordon off everything west of the Mississippi and put us all out there in a camp."