NEWS ALERT - David Carruthers, detained by US authorities

[tennis_balls]

unfortunately this is par for the course for the US govt.

why deal with an issue and create a huge new source of revenue when you can just throw somebody in jail and proclaim moral victory?

[winbig]

interference with the administration of Internal Revenue laws and tax evasion.

Since WHEN does a company NOT IN THE USA have to pay taxes to the US government?

Give me a fu******** break.

This is the most insane thing I've ever heard. I hope it gets thrown out before it even reaches trial.

It says on EVERY CASINO WEBSITE that if it's illegal in your jurisdiciton (state in this case), DO NOT SIGN UP. Plain and simple. This covers their ass, and there shouldn't be any liability on their part. Take the free gas debit card that is(was?) being offered by a couple of car manufacturers. It says in clear text on the ads "Not available in state1 and state2". If, for some reason, someone in state1 gets around this and that state finds out, are they going to go arrest the CEO of the car manufacturer?


Either way, if this guy gets convicted, onling gambling in the USA is over and done with forever, whether or not the bill passes.

[tennis_balls]

Originally Posted by winbig

It says on EVERY CASINO WEBSITE that if it's illegal in your jurisdiciton (state in this case), DO NOT SIGN UP. Plain and simple. This covers their ass, and there shouldn't be any liability on their part.

I believe this guy's company also takes sports bets via telephone. This could be the reason the feds chose him as their example.

Some operators are much more careful in regards to US law. WillHill for example allows US customers but won't allow them to place a sports bet.

I'm guessing Calvin Ayre won't be attending the Bodog shin-dig in Vegas this summer.

[whiterat1]

Here is the official statement from the DOJ.

http://www.usdoj.gov/opa/pr/2006/July/06_crm_443.html

FOR IMMEDIATE RELEASE
MONDAY, JULY 17, 2006
www.USDOJ.GOV
CRM
(202) 514-2007
TDD (202) 514-1888

Eleven Individuals and Four Corporations Indicted on Racketeering, Conspiracy and Fraud Charges

WASHINGTON – A federal grand jury in the Eastern District of Missouri has returned a 22-count indictment charging 11 individuals and four corporations on various charges of racketeering, conspiracy and fraud, the Department of Justice announced today. The indictment was returned on June 1, 2006, and unsealed today.

BetonSports PLC, a publicly-traded holding company that owns a number of Internet sportsbooks and casinos, was among the companies charged in the indictment. The founder of BetonSports.com, Gary Stephen Kaplan, 47, was charged with 20 felony violations of federal laws including: the Wire Act, Racketeer Influenced and Corrupt Organizations (RICO) Conspiracy, interstate transportation of gambling paraphernalia, interference with the administration of Internal Revenue laws and tax evasion.

Other defendants in the racketeering conspiracy include: Kaplan’s siblings, Neil Scott Kaplan and Lori Kaplan Multz; Norman Steinberg; David Carruthers, chief executive officer of BetonSports.com; Peter Wilson, media director for BetonSports.com; and Tim Brown, Steinberg’s son-in-law. The three other charged companies, all Florida-based, were Direct Mail Expertise, Inc., DME Global Marketing and Fulfillment Inc. and Mobile Promotions Inc. Also charged are William Hernan Lenis; Monica Lenis and Manny Gustavo Lenis, owners and operators of the Florida companies; and William Hernan Lenis’ son, William Luis Lenis.

“Illegal commercial gambling across state and international borders is a crime,” said U.S Attorney Catherine L. Hanaway of the Eastern District of Missouri. “Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws.”

The indictment alleges that Gary Kaplan started his gambling enterprise via operation of a sportsbook in New York City in the early 1990s. After Kaplan was arrested on New York state gambling charges in May 1993, Kaplan moved his betting operation to Florida and eventually offshore to Costa Rica. According to the indictment, BetonSports.com, the most visible outgrowth of Kaplan’s sports bookmaking enterprise, misleadingly advertised itself as the “World’s Largest Legal and Licensed Sportsbook.” The indictment also alleges that Kaplan failed to pay federal wagering excise taxes on more than $3.3 billion in wagers taken from the United States and seeks forfeiture of $4.5 billion from Kaplan and his co-defendants, as well as various properties.

The indictment alleges that Gary Kaplan and Norman Steinberg, as the owners and operators of Millennium Sportsbook, Gibraltar Sportsbook, and North American Sports Association, took or caused their employees to take bets from undercover federal agents in St. Louis who used undercover identities to open wagering accounts. The indictment also alleges that Kaplan and Mobile Promotions illegally transported equipment used to place bets and transmit wagering information across state lines and that DME Global Marketing and Fulfillment shipped equipment to Costa Rica from Florida for BetonSports.com.

The racketeering conspiracy alleges that the defendants agreed to conduct an enterprise through a pattern of racketeering acts, including repeated mail fraud, wire fraud, operation of an illegal gambling business and money laundering.

In conjunction with the indictment, the United States has filed a civil complaint in federal court to obtain an order requiring BetonSports PLC to stop taking sports bets from the United States, and to return money held in wagering accounts to account holders in the United States. U.S. District Judge Catherine D. Perry issued the temporary restraining order today. A hearing in the civil case has been requested within 10 days. As authorized by federal statute, the FBI is issuing letters to four telephone companies, instructing them to stop providing phone service to the Internet sportsbooks and casinos operated by BetonSports PLC.

Gary Kaplan resides in Costa Rica and a warrant has been issued for his arrest. Neil Kaplan, 40, is in custody in Ft. Pierce, Florida. Carruthers, 49, a resident of Costa Rica and Bromsgrove, Worcestershire, England, is in custody in Ft. Worth, Texas. William Luis Lenis and Manny Gustavo Lenis are in custody in Miami. Tim Brown was arrested near Philadelphia. Warrants have been issued for the other defendants not currently in custody. The United States will seek extradition of all defendants to St. Louis for prosecution.

The charges are the result of a joint investigation by Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation. The prosecution is being conducted by the Organized Crime and Racketeering Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the Eastern District of Missouri. The Florida Department of Law Enforcement, the Tampa Police Department, the Jacksonville, Fla. Sheriff's Office, and NFL Security and NCAA Enforcement Office personnel also assisted in the investigation.

The charges set forth in an indictment are merely accusations, and each defendant is presumed innocent until and unless proven guilty.

[tennis_balls]

i see sportsbook review downgraded betonsports recently due to many complaints from players of theft so perhaps this is a case of karma being a biahtch

[jetset]

Well, as the federal authorities point out at the foot of this release, these are only accusations at present, and the accuseds remain innocent until proven guilty - not much of a consolation when you're sitting in jail without the privilege of bail!

This passage was interesting: ""Illegal commercial gambling across state and international borders is a crime," said U.S Attorney Catherine L. Hanaway of the Eastern District of Missouri. "Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws."

If I remember correctly Missouri was the state from which much of the intimidatory activity against the media was waged, and it was the venue for the Casino City action that unsuccessfully challenged the DoJ on that media blitz of theirs.

The extradition threat was also revealing - after the Enron extraditions from the UK last week the feds seem to be more confident in deploying this method of bringing accuseds to court.

This whole sealed indictment thing is tricky, imo - Carruthers is a good example - the guy isn't informed that he's the subject of a US indictment and a warrant of arrest, and when he passes through the USA they nab him.

Edited to add that I think this is going to be one helluva legal fight - it certainly keeps the spotlight focused on internet gambling in the States...and it will play hell with stock prices in London.

[pacers31]

Sure looks like a government publicity stunt to help their bill along in the senate. I'm sorry but the tired old line of "click the mouse, lose the house" just doesn't fly with me. After all, it is my house to lose isn't it??? If they are truly worried about people losing the "house", why doesn't the government step in and save peoples houses when they lose jobs, get sick, etc. Feel good legislation for the right wing religious fanatics pure and simple!

[Casinomeister]

The latest from CNN:

Racketeering charges hit bets firm

Tuesday, July 18, 2006 Posted: 0850 GMT (1650 HKT)


Online gaming company BETonSPORTS, whose chief executive has been detained in the United States, said on Tuesday it faced a case over taking sports bets there.

The group said it had been unable to contact Chief Executive David Carruthers but had seen a U.S. indictment "alleging various criminal acts against multiple defendants."

It also said it faced a civil case ordering BETonSPORTS to stop taking sports bets in the United States and to return money held by U.S. customers in their gaming accounts.

BETonSPORTS, whose shares were suspended on Tuesday from London's junior AIM index, said a hearing in the case could be held within ten days.

More here:

http://edition.cnn.com/2006/BUSINESS...eut/index.html

[Westland Bowl]

Several things regarding this issue:

1. If Kaplan was arrested in 1993, did he square things off back then before he moved his operations to Costa Rica? BetOnSports seems to have unresolved legal baggage from the past now biting them in the butt.

2. Is Kaplan a US citizen? Unless it has changed in the past few years, US law considers expatriated citizens to be still US citizens for 10 years afterwards. Even income earned overseas are taxed as if you still resided on US soil.

3. Did David Carruthers join BetonSports after Kaplan moved it to Costa Rica? To charge a non-US person with issues involving a company on non-US soil and such betting operations is legal within his own country is preposterous.

4. D.O.J. is seeking federal wagering excise tax on $3.3 billion? Ok, what is the tax on that? 1%? If so, then that is $33 million. So D.O.J. is seeking forfeiture of $4.5 BILLION on all indicted parties? Even those of British citizens? Bloody hell !! I guess the wide shotgun approach is used in hopes of having at least some charges to stick.

A thinking person can see huge holes in this case. It is appalling the level of professionalism is soooo low within US government. However, they have many times the power to hurt you and it is best to maintain a bit of respect for them if I were David or Kaplan or et al.

[Casinomeister]

Originally Posted by Westland Bowl

...Unless it has changed in the past few years, US law considers expatriated citizens to be still US citizens for 10 years afterwards. Even income earned overseas are taxed as if you still resided on US soil...

And expatriated Americans are still required to file every year and PAY US income tax - even if you are living abroad and earn your living outside of the US - and pay taxes in your host country.