Major Sports Betting Bust

[jetset]

This just in from Associated Press - we're trying to get further detail:

New York:

Criminal charges have been brought against more than two dozen individuals and corporations in four states in connection with a billion-dollar-a-year gambling Web site, authorities said Wednesday.

One of the corporations is an offshore Internet company with an American counterpart, said Kevin Ryan, a spokesman for Queens District Attorney Richard Brown.

Ryan said the case is "one of the first times that a Web designer corporation and the companies that maintain the Web sites have been charged."

He said the arrests by the DA's office and the New York Police Department represent the first time that Internet gambling charges have been brought since President Bush signed into law last month the Unlawful Internet Gambling Enforcement Act.
Authorities declined to name any of those charged.

Ryan said arrests had been made in four states, and "we have initiated a $500 million asset forfeiture case," one of the largest in state history.

The charges come after a two-year international investigation that focused on Internet gambling.

Brown and Police Commissioner Raymond Kelly scheduled a midday news conference, at which seized cash and assets -- including artwork, jewelry, gold coins and sports memorabilia -- were to be displayed.

 

[The Dude]

Sheesh! Right in time for the G2E. Wondering if they are doing a "round-up" in Vegas.

So any guess on who this is? A billion dollar a year gambling website?

 

[jetset]

Police said the arrests were made in New York, New Jersey, Florida and Nevada. The scheme involved placing sports bets through bookies via a secure Internet site sports betting.

My money would be on Sportsbook.com which was hived off from Sportingbet when the UIGEA was enacted.

 

[soflat]

That's odd they won't name the companies or individuals involved. Maybe they're still hunting some folks down?

I came across the news a little while ago, and have been hunting for further info, but that AP story is the only one so far.

Let us know if you get any updates.

 

[jetset]

Well, it wasn't Sportsbook - here's the latest:

NEW YORK (AP) -- Prosecutors brought charges against 27 people in connection with a billion-dollar-a-year Internet sports gambling ring, including men identified by authorities as a professional baseball scout and a high-stakes poker player.

The charges were brought in connection with a site called Playwithal.com, run by the poker player, James Giordano, 52, of Pine Crest, Fla., Police Commissioner Raymond Kelly and Queens District Attorney Richard Brown said Wednesday.

Also charged was Frank Falzarano, 52, of Seaford, N.Y., identified by prosecutors as a scout for the Washington Nationals and a former scout for the San Francisco Giants. His alleged role in the operation was not immediately clear.

Search warrants executed in several locations resulted in the seizure of gambling records, computers and hundreds of millions of dollars in property.

The property includes four Manhattan condominiums, millions of dollars in cash, tens of thousands of dollars worth of casino chips from the Bellagio casino in Las Vegas, art, jewelry, gold coins, and a football signed by the 1969 New York Jets following their Super Bowl victory.

The scheme involved placing sports bets through bookies via a secure Internet site. The bets were taken on all kinds of sports, including football, baseball, basketball, hockey, car racing, and golf.

The charges include enterprise corruption, money laundering and promoting gambling.

Police said arrests have been made in New York, New Jersey, Florida and Nevada.

Kevin Ryan, a spokesman for the Queens District Attorney, said the arrests by prosecutors and police in New York City represent the first time that Internet gambling charges have been brought since President Bush signed into law last month the Unlawful Internet Gambling Enforcement Act.

Ryan said "we have initiated a $500 million asset forfeiture case," one of the largest in state history.

The charges come after a two-year international investigation that focused on Internet gambling.

Brown and Kelly had scheduled a news conference, at which seized cash and assets -- including artwork, jewelry, gold coins and sports memorabilia -- were to be displayed.

 

[Professor]

Yep, sportsbetting again gets lumped in with "Internet Gambling" by MSNBC.

These type of news "events" have a chilling effect across the board when the main stream media makes the main focus of their reports "Internet Gambling Websites" rather then bookies taking wagers illegally.

Read the report here:

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[jetset]

Here's the charges:

You do not have permission to view link Log in or register now.

That name Prolexic Technologies rings a bell - I seem to recall that company was involved in tracking down some Russian DDOS merchants last year.

 

[spearmaster]

I wish to point out that no charges have been brought under the UIGEA - the mention of it is simply to draw attention to themselves. The quote is:

..the arrests by the district attorney's office and the New York Police Department represent the first time that Internet gambling charges have been brought since President George W. Bush signed into law last month the Unlawful Internet Gambling Enforcement Act.

The actual charges are under:

felony violations of the Penal Law (Article 460 Enterprise Corruption), and(Article 225 Gambling Offenses)

And Professor - it was AP who wrote the story, not MSNBC

 

[Professor]

And Professor - it was AP who wrote the story, not MSNBC

I read it here:

You do not have permission to view link Log in or register now.

 

[Mousey]

The charges come after a two-year international investigation that focused on Internet gambling.

We had a local bookie arrested a couple of years ago. He probably had some sort of internet hook up, too.

BUT! As we all know, they're talking apples and tomatoes.

 

[dominique]

I think we can safely say that sportsbetting online is illegal in the US and the wire act has made it so for years (even so the FCC ruled that the internet and the telephone are not the same thing).

If you make money taking sportsbets over the internet and they think it's enough money to make it worthwhile, you will be in trouble.

There is nothing new about this.

 

[Professor]

Check out the title of this follow up article post at MSNBC this afternoon

Criminal charges brought over online gambling

You do not have permission to view link Log in or register now.

These are reports the general public keeps getting bombarded with

 

[jetset]

Update

$3.3 BILLION REVENUES GENERATED BY BUSTED SPORTSBOOK (Update)

$2.5 million taken in bets every day

The gambling website Playwithal.com, busted by New York police and justice authorities this week generated over $3.3 billion in revenues over the past 28 months that it has been under surveillance prior to being shut down, police have revealed at a press conference.

27 people, several of them closely involved in the US sporting and poker scene were detained in the arrests, which flowed from a long running covert investigation by the authorities in four states.

However, claims that the huge bust was the first carried out under the new US Unlawful Internet Gambling Enforcement Act are apparently mistaken - the charges made public by the DA's office are felony violations of the Penal Law (Article 460 Enterprise Corruption), and (Article 225 Gambling Offenses)

Investigators said the illegal operation, based in New York City's borough of Queens, was alleged to have taken in $2.5 million a day over the last 28 months and was the largest they had ever broken up.

"It rivals casinos for the amount of betting," New York Police Commissioner Raymond Kelly told a news conference. "The magnitude of this really boggles the mind."

The Web site functioned as a computerised betting sheet and was operated by professional poker player James Giordano, 52, of Pine Crest, Florida, who was charged with being the scheme's bookmaker by taking the bets.

Bets through the site and through a toll-free "800" number were taken on horse racing, football, baseball, basketball, hockey, golf, car racing and tennis.

Frank Falzarano, 52, of Seaford, New York, was charged as a "runner" in the scheme and identified by authorities as a scout for baseball's Washington Nationals and a former scout for the San Francisco Giants.

Arrests were made in New York, Nevada, Florida and New Jersey and charges in the indictment include enterprise corruption, money laundering, promoting gambling and conspiracy.

Seized in the bust were four Manhattan condominiums, millions in cash, tens of thousands of dollars in casino chips from Las Vegas' Bellagio casino, rare art, jewelry, gold coins, and a football signed by the 1969 New York Jets championship football team.

 

[jetset]

Careless

Oops! In their haste to announce the big bust it looks as if the authorities may have wrongly included Prolexic Technologies in their indictment.

Prolexic is a well respected company in the forensic and DDOS field, and they have taken immediate steps to point out that they were simply anti-DDOS contractors to the Playwithal site:

Prolexic Technologies Announces Being Wrongly Accused of Hosting Gambling Web Site in Break Up of Online Betting Ring

HOLLYWOOD, Fla.--(BUSINESS WIRE)--Earlier today, New York authorities issued a 33-count indictment regarding an illegal online gambling operation. Prolexic Technologies, which provides Distributed Denial of Service (DDoS) solutions, was named in the indictment as the Web host provider to an Internet sportsbook.

Prolexic Technologies provides a service that, amongst other things, masks a client's IP address in order to mitigate DDoS attacks. When a trace route is performed, it appears that Prolexic Technologies is the host server, when in fact that is not the case.

"Our job is to prevent DDoS attacks, which are one of the most costly cybercrimes on the Internet," said Keith Laslop, president of Prolexic Technologies. "Prolexic Technologies in the past has worked closely with U.S. and U.K. law enforcement agencies in regard to tracking DDoS attackers, and was instrumental in the arrest of a high-profile Russian mafia figure that used DDoS to take Web sites hostage until paid a ransom. We have a history of cooperating with law enforcement authorities, and our name will be cleared of any wrong doing. Meanwhile, we are continuing to operate, as the leader in DDoS defense services."

About Prolexic - www.prolexic.com

Prolexic Technologies is the worldwide leader in DDoS mitigation services. More companies and service providers entrust their networks to Prolexic for DDoS protection services than any other Internet security company in the world. Leveraging unique filtering techniques, high-speed bandwidth and peering, advanced routing, and other patent-pending devices, Prolexic has created the most powerful DDoS detection and protection system in the world.

Consequently, Prolexic has demonstrated success in monitoring, filtering, and routing massive traffic flows, often shouldering multi-gigabit-per-second distributed attacks for its customers. Prolexic's solution is easily implemented into networks of all sizes, often with little or no infrastructure investment.

 

[jetset]

Please change thread title

'Meister, I believe Spear made a good point here that it is increasingly clear that this bust is under standard US felony laws and not the UIGEA as claimed by the Queens DA spokesman.

May I suggest that for accuracy we re-title the thread "Major Sports Betting Bust?"

 

[The Dude]

'Meister, I believe Spear made a good point here that it is increasingly clear that this bust is under standard US felony laws and not the UIGEA as claimed by the Queens DA spokesman.

May I suggest that for accuracy we re-title the thread "Major Sports Betting Bust?"

Gotcha!

...$2.5 million a day...

And they couldn't spend the money to protect their business to make sure they were within the law? I just don't get it.

 

[jetset]

Thanks, Bryan!

 

[Mousey]

Good grief... we all knew that this was a sports betting/bookie/gambling ring bust, too bad someone didn't fully brief the Queens DA before he spouted off to the press.

Well... I've never been interesting in sports betting, so I guess it's not unusual that I've never heard of playwithal. Are they really that big a deal?

 

[kingfile64]

3.3 billion profits based on 2.5 million in bets a day does not add up. 2.5 million in bets for 365 days has a profit expectency of about 45 million profit. that is a long long ways from 3.3 billion.

 

[dominique]

The troublesome thing is that they snuck this in:

on charges including enterprise corruption, money laundering and promoting gambling.

This likely will not be pursued IMO (I am not a lawyer, not a legal opinion here) but it will sit in the charges and set a precendent of someone being convicted who has been charged with this.

 

[jetset]

Covertly accessed laptop led to big sports bet bust

I don't want to thrash this story to death, but the following AHN piece gives an interesting glimpse into the tactics used by the authorities to bust Giordano and his his associates.....


HOIST BY HIS OWN LAPTOP (Update)

How police uncovered the big sports betting bust

The Miami publication All Headline News this week gave an insight into how the Playwithal sports betting bust was initiated by a police informant and confirmed by covert access to a laptop used by the main accused in the case.

The computer laptop of Miami resident James Giordano led police to uncover the billion dollar online gambling ring.

Police received a tip in 2005 that initiated the investigation, claims AHN. A search warrant was obtained in June, and police gained access to Giordano's computer laptop that he had left in his hotel room while he was attending a wedding in New York. Officials were able to make a copy of the hard drive from the computer.

The information was used to initiate and build a case that stretched over four states.

Local police departments and FBI agents coordinated the busts. The investigation culminated in the arrests of 27 people from Florida, New York, New Jersey, and Nevada in connection with the online gambling ring.

Giordano was arrested in Miami, and another top ring leader, Frank Falzarono, was arrested in New York for their involvements in the illegal operation.

Gambling records, computers, millions of dollars in cash, condos, jewelry, coins and collectibles have been seized from those who were arrested.

Various charges included illegal gambling operations, corruption and money laundering.

According to the Sun-Sentinel, two Florida companies and one New York company were also charged in relation to the gambling operation. These companies helped Giordano with technical computer support for the restricted format of the gambling operation's website. The betting operation was different than others in order to avoid detection by recent federal laws.

According to the Miami Herald, Police Commissioner Raymond Kelly stated, "This is the largest illegal gambling operation we have ever encountered."