FINAL CHAPTER FOR BETONSPORTS?

11 May 2007

Online gambling firm negotiates a guilty plea and plans to liquidate

The Betonsports saga could be nearing an end, according to a report in the UK newspaper The Sunday Telegraph, which quotes company officials as saying that the embattled company could be about to cop a guilty plea bargain with the US Department of Justice, and that liquidation proceedings could be on the books thereafter.

The quid pro quo for the present board of directors would be impunity from further proceedings or personal charges.

Quite where this leaves fired CEO David Carruthers, who still awaits trial after more than 8 months of house arrest in St. Louis, or for that matter the many unpaid players of the group owed money by the Antiguan subsidiary of the company is anyone's guess.

The Telegraph says that the decision to accept a guilty plea bargain to a range of racketeering and wire fraud charges against the company followed advice from the company's American lawyers.

Chairman Clive Parritt apparently told the newspaper that a settlement would prevent any as yet unindicted cases being brought against the board of directors, which includes Lord Glentoran, the Tory shadow minister for Northern Ireland.

Betonsports was one of several online gambling companies plunged into crisis when it was forced by US federal court order to suspend all operations in the American market following the arrest and detention of CEO Carruthers whilst transitting the US. Carruthers was immediately fired and apparently disowned by his fellow directors and remains under house arrest, confined to the environs of St. Louis, Missouri and still awaiting trial.

In March 2007 BoS founder and former executive Gary Kaplan was also arrested after a long manhunt that culminated in his arrest in the Dominican Republic. He, too remains in US custody pending trial.

The BoS directorate has been in sensitive negotiations with the Department of Justice, and although a final settlement document is yet to be received from the DoJ, chairman Parritt appears willing to sign the guilty plea. Later this month, on May 16 a special meeting of creditors and shareholders will be held in the UK, at which it is expected the liquidation of the company will be proposed.

The newspaper quotes Parritt: "We are close to an agreement with the DoJ under which the case against Betonsports will be closed. We will agree the company has been associated with being part of an 'illegal gambling enterprise' between 1992 and 2006 but essentially we are being penalised for buying the company from Kaplan."

Parritt said US customers are still owed money by the main subsidiary, BetonSports Antigua, which is also being wound down.

"This deal will allow the liquidators to deal fairly with the creditors of Betonsports plc, Parrit said. "Without such an agreement the liquidators would have to manage the continuing case in the United States."

Richard Creed, the financial director of the company said: "If there is a way of mitigating circumstances and reducing possible fines through a corporate guilty plea that gets the company off the indictment, then that has to be an option - the financial benefits of pleading guilty will be substantial."

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