Betonsports saga nearing the end?


RIP Brian
Feb 22, 2001

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."


Betonsports founder pleads not guilty to racketeering and other charges

Gary Stephen Kaplan, the founder of besieged online gambling group who was arrested in Dominica last month on a slew of alleged US crimes and extradited back to America, appeared in court this week.

Kaplan had been sought by the FBI for some eight months (see previous InfoPowa report) following the arrest of the company's CEO, David Carruthers and others triggered a Department of Justice action that has brought the company to its knees. Carruthers, a British subject, remains under house arrest in St. Louis and still awaits trial on charges he has strongly denied.

Reuters reports that Kaplan appeared before Judge Mary Ann Medler of the U.S. District Court and entered a plea of not guilty.

She ordered him to remain in custody pending a May 25 detention hearing that may determine if he can be released on bond.

Kaplan was indicted in June of 2006 by a federal grand jury in Missouri which accused him and 10 others of engaging in racketeering, conspiracy and fraud arising from the operation of Costa Rica-based Internet gambling businesses.

Betonsports, which once traded on the London Stock Exchange, was forced in August 2006 to close down its U.S. business which accounted for 95 percent of its profits. It has since intimated that it is likely to go into liquidation, with its Antiguan subsidiary left to pay off US players.


Detained former Betonsports CEO comes out fighting

After 10 months under house arrest in St. Louis and with the US Department of Justice charges against him still untested in a court of law, David Carruthers might be expected to be growing impatient with his invidious situation.

Carruthers, then the high profile chief exec of, was arrested in July last year by US authorities at Fort Worth airport in Texas whilst transitting from the UK to Costa Rica. At the time Betonsports was one of the leading public companies in the online gambling industry, a situation dramatically reversed by the subsequent enforcement activities of the US Department of Justice (see previous InfoPowa reports)

The board of Betonsports disowned Carruthers, firing him from his executive position and leaving him to face charges of racketeering and wire fraud with another nine persons associated with the company. Carruthers raised a million dollar bail, but is still required to remain under house arrest in St. Louis and wear an electronic tag.

Fast forward to May 2007, where Judge Mary Ann Medler of the District Court in St. Louis reportedly informed Carruthers that the recent World Trade Organisation dispute findings against the discriminatory nature of United States online gambling laws may be a defence if pursued.

Carruthers has apparently taken Judge Medler's information on board and reports this week indicate that he is drawing attention to his plight as a British citizen held in a foreign country. Carruthers has contacted unnamed individuals working for former advisers of Betonsports, asking them to lobby the UK government, the European Union and UK and European Members of Parliament on his behalf.

Those he has contacted include people at London brokers Evolution and UK auditing group Baker Tilly, requesting that they write to Charlie McCreevy, the European Commissioner for internal market services and Peter Mandelson, the UK's European Commissioner for external trade. Members of the UK and EU Parliament are also understood to be on his contact list.

In his communication, sent earlier this month, Carruthers reportedly outlines Judge Medler's decision that allows his lawyers to seek outside opinion regarding the recent finding by the World Trade Organisation.

Carruthers accuses the US government of actions that have destroyed businesses, free competition and lives in his appeal for help. The letter adds that now more than ever it is important to get heard and that it is critical to communicate and ensure that (the) impact and importance of this WTO decision are not lost to silence and inaction.

The former CEO says the WTO decision has extraordinary implications for my life and adds that the issue goes beyond my personal circumstances.

The US decision to arrest me not only shut down BetonSports, but the actions by the US government have destroyed nearly all the public online gaming companies in the UK. Based on what the WTO has now called a treaty violation, more than US$10 billion in equity of UK-listed companies were wiped away. Three UK listed gaming companies have closed completely and other UK citizens have been arrested as well, victims of a policy that the WTO has now determined as unfair and violates their treaties.

The appeal from Carruthers follows a week in which the founder of Betonsports, arrested in March in Dominica after an extensive search by US authorities, appeared in briefly in a St. Louis Court. Gary Stephen Kaplan (48) entered a plea of "not guilty" before Judge Medler to a series of charges laid by the Department of Justice that included racketeering

"You understand the nature of the charges? I can't read them all," Medler asked Kaplan of the 20-count indictment. "Yes," Kaplan responded.

Prosecutors claimed London-based BetonSports and Kaplan, along with former CEO David Carruthers and nine other defendants, violated U.S. laws against Internet gambling. The prosecution is demanding the company forfeit $4.5 billion.

Kaplan was remanded in custody to May 28, when a further hearing will determine whether bail can be granted.

And on May 16, Betonsports shareholders will be asked to approve that the company enter a guilty plea after what are reported to be sensitive negotiations with the US Department of Justice. Already crippled in a business sense by an early acquiesence to a US court order to cease accepting American business, the once successful Betonsports in heading for the liquidator, according to statements by its chairman and financial director.
Well, that bit about the WTO decision and Carruther's defense is very interesting. Can the US hold a British businessman and convict and sentence him based on a law which the WTO has ruled invalid?

If they can't, in theory that means that all the other operators needn't fear being picked up at some foreign airport, or even passing through the US.
Finally David fights back!

I hope he succeeds.

Grabbing foreign nationals at the airport for doing what is legal in their country and doing so in discord with the WTO and EU should not be possible.
Kaplan update


Peripatetic Kaplan has false passports, large amount of foreign cash says federal prosecutor

Hard on the heels of Thursday's guilty plea from the Betonsports online gambling group, its founder appeared in a St. Louis, Missouri district court Friday on a bond hearing.

Gary Stephen Kaplan (48), who faces 22 charges involving racketeering and other allegations was arrested in Dominica in March and extradited to the United States in custody, the St. Louis Post-Despatch reports.

Assistant U.S. Attorney Mike Fagan claimed before Judge Mary Ann Medler that Kaplan was a flight risk who had planned to escape to a country from which he could not be extradited. Fagan said the hardest thing in the Internet age is getting control of cross-border criminals who, like Kaplan, can operate "remote-controlled crime on a huge scale."

Kaplan founded Betonsports, which intends to go into liquidation after it was crippled by US enforcement activities. The British-listed company, which once took in more than $1 billion in bets annually, is out of the firing line following an agreement to cooperate on witnesses and information with the American authorities, but Kaplan, ex-CEO David Carruthers and nine other accuseds still face prosecution.

When federal agents arrested Kaplan in Dominica earlier this year they found that he had a handcuff key and five passports with his picture, some with different names, places of birth or other information in his possession. Kaplan also carried large sums of cash from four countries where extradition is difficult or impossible, Fagan revealed.

A spiral notebook contained details of a plan to win diplomatic protection and asylum in Nicaragua, which would have included a discreet helicopter landing pad, Fagan said.

He also said Kaplan has the ability to move among nations anonymously. Using his U.S. passport, Kaplan traveled to Israel, Venezuela, Colombia, Argentina and Peru in December, the Assistant US Attorney said. Records indicate that he next popped up in Argentina using a Dominican passport, without any record of how he got there from Peru.

After agents searched a Miami address in February and found computer records, Kaplan fled from Argentina to Venezuela using a Peruvian passport. He admitted bribing Venezuelan police and said he was trying to dodge the charges, Fagan said.

Fagan told the court that Kaplan has $107 million in assets outside the U.S. and controls multiple bank accounts.

Warren Hoeffner, Kaplan's father-in-law said that his daughter is buying a house in the St. Louis area and is planning to move there with the couple's two children, and that Kaplan was a devoted family man who would not flee or do anything to harm his relatives. Hoeffner offered to put up his second and third houses in Colorado and Florida, worth about $6.6 million, to guarantee Kaplan's appearance in court.

Kaplan's lawyers have asked Judge Mary Ann Medler for more time to respond to Fagan's allegations. According to the US Attorney website, the next hearing is scheduled for June 4 (Criminal Case Number -- 4:06CR337 CEJ ).
I think there is likely a real case against Kaplan, based on his early dealings as bookie in NY.

If he funded BOS with gains from that, they will likely say the company was based on ill-gotten gains and racketeering and the case could be rooted there.

Going underground sure didn't help... it's never a good decision to go underground.

On the bright side, if that is so, it has nothing to do with David Carruther's case.


Bail denied by St. Louis judge

The Evening Standard reports that Betonsports founder Gary Kaplan (see previous InfoPowa reports) has been refused bail by St. Louis Judge Mary Ann Medler. Kaplan faces a number of charges under American racketeering and fraud laws and has been held in custody since his arrest in Dominica in March this year.

Directors of Betonsports admitted a charge of racketeering on behalf of the company last (May) month and undertook to cooperate with US justice officials in ongoing investigations believed to involve Kaplan, former BoS CEO David Carruthers and 10 other co-defendants. None of the accuseds have yet been tried, and Carruthers has been under house arrest in St. Louis for almost a year.

After hearing evidence from both prosecution and defence, Judge Medler said there was a risk Kaplan would flee if freed. "The defendant and his family have no real ties to anywhere or to any community," Medler said.

Kaplan (48) first appeared in court last month on arraignment and pleaded not guilty.

The US Unlawful Internet Gambling Enforcement Act passed in October last year prohibits financial transactions in the US with online gaming companies but lawyers for BetonSports, Carruthers and Kaplan say the law doesn't make the acceptance of US bets illegal.

Following US Department of Justice activity, the once wealthy and industry leading is insolvent and has filed for liquidation in the UK. The arrest of ex-CEO Carruthers and other DoJ actions, followed by the introduction of the UIGEA caused many top companies to exit the US market and inflicted losses of billions on investors and publicly listed companies.

In more recent times there have been reports that top Gibraltar-based companies Party and 888 Holdings have been in discussions with American law enforcement agencies, presumably seeking amnesty for pre-UIGEA activities in the US market.


BetonSports founder claims that Wire Act use is overly broad and charges are flawed

According to the Bookmaker's Review this week, the imprisoned BetonSports founder Gary Kaplan is vigorously opposing his continued incarceration and Department of Justice charges concerning offences under the Wire Act and RICO (Racketeer Influenced and Corrupt Organizations Act) laws.

The charges originate from Kaplan's claimed involvement with the BetonSports online gambling group, which was forced to withdraw from the US market by Department of Justice initiatives, losing most of its business and setting it on the road to liquidation.

Kaplan was arrested in the Dominican Republic earlier this year and extradited to the USA after an FBI search over several months (see previous InfoPowa reports). His applications for bail have been opposed on grounds that he constitutes a flight risk.

The report reveals that Kaplan has engaged a top legal team to fight his corner which includes ace lawyer Ben Brafman, who has in the past represented rapper P Diddy and former online gambling entrepeneur Jay Cohen.

The legal team has apparently made application to have the charges against Kaplan withdrawn on grounds that the Department of Justice's interpretation of the U.S. Wire Act is overly broad, and the indictment fails to present a RICO violation because it does not adequately show two essential elements in RICO charges: the continuity and structure necessary for a RICO enterprise and a pattern of racketeering activity.

Meanwhile, the gambling information portal Gambling911 reiterates earlier private claims by a Kaplan source that Kaplan is not a well man, and his condition is exacerbated by captivity.

"He is currently being denied medication and a diet suitable for the conditions ....and he's in a 30 person facility with no special units," a source close to Kaplan's case told the portal.

Kaplan apparently suffers from severe back pain as a result of a past injury.

There has been no further word on a trial date for former BetonSports CEO David Carruthers, whose arrest in Fort Worth, Texas over a year ago whilst in transit to Costa Rica triggered the Department of Justice action against BetonSports. Carruthers remains under house arrest and onerous bail conditions in St. Louis and has yet to have his day in court. He has made it clear that he will strongly defend himself against similar charges as those faced by Kaplan.
Kaplan stays in jail


BetonSports founder's ill-health appeal fails

The Bloomberg business news agency reports that Gary Kaplan (48), the BetonSports plc founder captured 10 months after fleeing a U.S. government indictment for illegal Internet betting, has lost his bid to be freed on bail due to health considerations as he awaits trial.

U.S. District Judge Carol Jackson in a St. Louis federal court denied Kaplan's request to be released. He was initially denied bail by a federal magistrate in June after being extradited from Dominica where he was arrested by FBI agents working in concert with local authorities .

"There is no condition or combination of conditions of release that would reasonably assure the defendant's appearance," Jackson said this week in a ruling.

Formerly a major player in the online gambling industry and with most of its business in the United States, BetonSports was ruined by US Department of Justice actions that commenced with the arrest whilst in transit of former CEO David Carruthers over a year ago.

Carruthers, who has vigourously protested his innocence throughout, remains under house arrest in St. Louis and has yet to have his day in court on the many and serious charges laid against him by DoJ lawyers.

The London-based online gambling company pleaded guilty May 24 to a single racketeering conspiracy charge and agreed to cooperate with prosecutors by furnishing evidence against Kaplan and 11 co-defendants, including Carruthers. All of the 11 individual defendants have pleaded not guilty.

Kaplan had previously offered to pay for a private security detail to guard him and agreed to wear electronic monitoring equipment if he was granted bail.

But not about the day in court he still awaits after 18 months of house arrest

In July 2006, a seemingly routine business flight from London via the USA to Costa Rica turned into a long-running nightmare for the then CEO of the powerful BetonSports online gambling group, David Carruthers. Arrested on US Department of Justice sealed warrants on a raft of accusations that covers some 22 felonies, Carruthers found himself treated as a common criminal and detained.

Subsequently, he was allowed out on astronomical bail and stringent house arrest conditions. These kept him in St. Louis awaiting trial as the months slipped past and other individuals were pulled into the charges, including BoS founder Gary Kaplan, who was arrested in Dominica and extradited to the States. Kaplan remains in custody despite three requests for bail, the latest to an appeals court.

This week Interactive Gaming News editor Mark Balestra spent some time with Carruthers to find out how a dynamic business executive keeps himself busy under these difficult circumstances - aside from preparing for his day in court, that is.

In the interview, Carruthers is far from sorry for himself, and has adopted a positive and productive approach to his incarceration. Avoiding for legal reasons any discussion of his defence case, he told Balestra that after eighteen months of restriction he is still making the best of the things and looks forward to a fair trial.

Now in his fifties, Carruthers is probably in the best physical shape of his life, exercising and training for a 26.2 mile marathon run for charity next year for which he is seeking sponsors. In October he launched a Web site featuring news and information related to the online gambling industry as well as information about himself. He updates the site regularly, and blogs daily on politics, sports, health and whatever else comes to mind.

Talking about the St. Louis marathon, Carruthers told Balestra: "I was focused on trying to find a charity that was local and would help perhaps children, and I discovered that the race, the event itself, has two nominated charities the first one being leukemia, which involves children as well as adults, and the second one being back stoppers, which is a local charity focused on people that are here to protect and serve others that have suffered great loss, and supports their families after that great loss. And I think they were very fitting and worthwhile charities. So I've decided to run with them. . . . No pun intended. And I look forward to being able to raise some money for them.

"One additional factor is that back in the U.K., my son's best friend for over 20 years was struck with leukemia in 2006 and is currently battling back well post bone marrow transplant. His name is Jonjo Roouney. He is additional motivation and an inspiration to me. His troubles started almost the same time as mine.

"There are two ways in which you can help me raise some money for these charities. One is to make a straightforward donation, to reward them for my efforts in running this race. And the other one is that I'm going to put my running vest up for sponsorship opportunity. And I intend to hold a silent auction for that opportunity. Those that are interested can submit a bid by email. There's two catches: The first catch is that it will be exclusive, so it will be expensive. And the second one is that if I can get around to 26.2 miles of a very hilly marathon course in St. Louis in under four hours, I'd like them to double their commitment, which will give me more even more motivation to ensure that we can get around this course in a respectable time.

"I've not gone about this with the view of hobbling around in six hours. I'm going to try to do it in a respectable time. And I think under four hours for the fist-time marathon for a 50-year-old who's been sat on his ass for 35 years is quite a high bar."

Carruthers says he remains in good spirits and is focusing mind and muscles where he can, ".....and I'd like to wish anybody that knows me - all my friends and colleagues and associates - a very healthy and wealthy seasons greetings."

To make a donation to David's worth marathon cause, contact him at for details. You'll also find more information at his Web site:

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