Partygaming Co-Founder Pleads Guilty

Mousey

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By THE ASSOCIATED PRESS
Published: December 16, 2008
A co-founder of an Internet gambling company has pleaded guilty to a federal crime and agreed to forfeit $300 million.

The plea was entered by Anurag Dikshit of India Tuesday in federal court in Manhattan. He is the co-founder of PartyGaming, an online gambling company registered in the United Kingdom.

Mr. Dikshit, who pleaded guilty to violating the federal wire act, signed a cooperation agreement, and prosecutors...
 

MJackson

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Cooperation Agreement

He signed a cooperation agreement with the Enemy? That's some world class DikShit if you ask me. Heck maybe he deserves to go some place where u need an Anurag just to take a shower.
 

sdaddy

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Well, to be fair, we've seen a lot of online gambling execs plead guilty and pay a hefty fine in recent years rather than face jail time (not to mention the long time you could be incarcerated/confined just waiting for the trial to start...just ask David Carruthers).

I just hope that if a company with no sports betting ties is ever charged under the Federal Wire Act, that it will have the courage not to fold and rely on the opinions of legal experts that the Wire Act only restricts accepting sports betting. The Feds keep saying that the Wire Act covers all online gambling, but the only relevant Federal case is the conviction of Jay Cohen for operating an offshore sports betting site.
 

jetset

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And the Fifth Court of Appeals ruled that it only applies to sportsbetting. The Wire Act was passed in 1961 specifically to put the brakes on telephonic sports betting and alleged organised crime involvement.

It was never intended as an anti-Internet gambling measure, because the legislators could never have envisioned all those tubes on "The Internets"!

The DoJ is out of step with all sorts of learned people (and some politicians) on this issue and has relied more on intimidation and "settlements" rather than risking a full hearing in a major court to decide the issue.

It's a strange situation, alright....
 

Westland Bowl

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I couldn't find how Dikshit got arrested. Did he fly to the US and got arrested at the airport or something? When was this?
 

SteveCut

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Forgive me, as I'm not an American I'm not sure what the acronym "DOJ" stands for.
Strictly from context I'd guess, "Department of Jerks"?
Close?
 

jetset

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I couldn't find how Dikshit got arrested. Did he fly to the US and got arrested at the airport or something? When was this?

Apparently he has been negotiating this settlement for some time with the DoJ, and once the horsetrading was through he flew to New York to briefly appear and plead.

He had already paid $100 million in by that stage. The balance is due $100 million within the next three months, and the final payment by September 2009.

Sentence was deferred for two years (unless Dikshit reneges on the deal) to make sure he pays up I guess. The penalty could be 2 years in jail, but it is unlikely this will be imposed once he has paid up.

In the meantime he has posted a bail bond of $15 million and there are some travel restrictions limiting him to his native India, the European Union, and New York. He has also agreed to cooperate with the Department of Justice in further online gambling investigations.

He is actually based in Gibraltar - a good tax decision btw.

An interesting footnote here is the fact that news that Party Gaming was in the final stages of its own seperate negotiations with the DoJ drove the share price up, immediately valuing Dikshit's remaining shares at approximately the cost of his settlement!

Those shares could go dramatically higher if the company does a deal with the DoJ which frees it (and potential investors or buyers) from fear of US prosecution. And Party Gaming has already said its settlement number will be "significantly" lower than that agreed to by Dikshit in his independent personal agreement.

There's already speculation that Party Gaming group would make a juicy acquisition for any big US gaming company looking for an established Internet business should the Americans decide to legalise online gambling in the long run.

So for Dikshit, there are some promising prospects (he still owns 28 percent of the company) ahead even if he has had to shell out $300 million now.
 
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