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Eleven Individuals and Four Corporations Indicted On Racketeering, Conspiracy And Fraud Charges
7/17/2006 5:34:00 PM
<HR>To: National and State desks, Legal Reporter
Contact: U.S. Department of Justice, 202-514-2008; Web: http://www.USDOJ.GOV

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.

http://www.usnewswire.com/
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/© 2006 U.S. Newswire 202-347-2770/<!-- google_ad_section_end --><!-- / message -->
 

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Clip Joint said:
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.<!-- google_ad_section_end --><!-- / message -->

:monsters-
 

And if the Road Warrior says it, it must be true..
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WOW!!!!

I would have never thought they could do this.
 

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That's not an article, that's a press release from the prosecutor's office. And yes it is very informative.
 

zee

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So, let me just get something str8. Every single person out there who has a gambling business, doesn't have the right to cross US soil anymore without any regard if he's a US citizen or not or if the business accepts US customers? If Fred Done from betfred.com was to get a vacation to Florida will he be charged too? Wtf people? Is your country really INSANE?
 

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I do not think they randomly chose BOS - they have had a hard on for G for many years now. I think they finally got all the info they needed to go after him. I know G is involved with the IGot people also( after he supposedly sold his shares last year and while they were starting that project) - I wonder if they will be affected also.
 

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Well that is the end of the online gambling industry in the United States.

I am very glad I took down my website 3 or 4 months ago as the steam to make online wagering illegal picked up. Preemptive in my opinion was much better than legal problems.

This is a landmark case. The outcome of this case will define a generation.

Will the UK have the balls to fight this, or will they just let the U.S. do as they please. I always thought the US would make an example of some Carribean book with no link to the UK. I never thought they would go after a publicly traded company in the UK.

I am sick and disgusted to live here.

-Sean
 

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sean1 said:
Well that is the end of the online gambling industry in the United States.

I am very glad I took down my website 3 or 4 months ago as the steam to make online wagering illegal picked up. Preemptive in my opinion was much better than legal problems.

This is a landmark case. The outcome of this case will define a generation.

Will the UK have the balls to fight this, or will they just let the U.S. do as they please. I always thought the US would make an example of some Carribean book with no link to the UK. I never thought they would go after a publicly traded company in the UK.

I am sick and disgusted to live here.

-Sean

I think now the line in the sand has been drawn (assumming we are only talking online gaming here and nothing more serious). We are at the crossroads and yes I don't think the US will care about the UK. What we can hope for is that The UK STANDS UP TO THE US IN THE WTO if this IS the fact!!!!!!!!!
 

zee

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Most UK books don't accept US clients, again, UK books will not care one bit what the US does. Bet365 is the only exception.

Edit: I seriously doubt Sean1 is spot on. AFAIK, the story has no impact on gambling whatsoever except that it will make people reconsider twice before flying trough the States.
 

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zee said:
Most UK books don't accept US clients, again, UK books will not care one bit what the US does. Bet365 is the only exception.

Edit: I seriously doubt Sean1 is spot on. AFAIK, the story has no impact on gambling whatsoever except that it will make people reconsider twice before flying trough the States.
Well if they don't accept US customers, then the rest of them will be applauding this no doubt.
Nothing New---I still think this guy was involved in more than online gaming! Reason being Calvin Ayre.
 

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zee said:
So, let me just get something str8. Every single person out there who has a gambling business, doesn't have the right to cross US soil anymore without any regard if he's a US citizen or not or if the business accepts US customers? If Fred Done from betfred.com was to get a vacation to Florida will he be charged too? Wtf people? Is your country really INSANE?

Not to get on your case zee as everyone is over-reacting but, look at the title again. The charges are Racketeering, Conspiracy and Fraud.

They are being brought down by their criminal behaviour of theft and fraud and not online gambling.

Now I'm sure DOJ is only to happy to say “Illegal commercial gambling across state and international borders is a crime,” but that is not the core of the charges.
 

zee

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Woody, if the guys are bad guys and it's proven, let them do their time. If it's about gambling tho, your country is way out of line. The line you quoted is the one that got me out of control.
 

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My understanding is that the Racketeering charge is a catch-all

It includes things like:

2085 Syndicated Gambling

1. Syndicated Gambling: Sections 801-811 of the Organized Crime Control Act of 1970, which amended Title 18, United States Code, by adding Sections 1511 and 1955, are designed to combat "illegal gambling business" or syndicated gambling. Title 18, U.S.C. § 1511 is directed at the political and police corruption which makes widespread illegal gambling possible, while Title 18, U.S.C. § 1955 is directed at the illegal gambling itself.
 

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Yes, agreed - if the charges are much more, then gambling might be ok...

I have heard the guys involved have been linked to theft, illegal pharmacy rings dispensing narcotics without scripts, beating up winners, etc...

Calvin Ayre has traveled to the US at least 10 times in the last 3 years and has announced where he will be. He has yet to be arrested.

I suspect his attorneys will likely contact the DOJ before he shall return.

If he returns to Vegas for his bash, it is a very good sign. If he does not, it is a very bad sign.

A very scary part is that they indicted marketing companies. I am very glad I got out of the marketing business months ago...
-Sean
 

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Well I think that this is going to be good for small books, but I just want to know what is going to happen to all the guys working there?
 

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zee said:
Woody, if the guys are bad guys and it's proven, let them do their time. If it's about gambling tho, your country is way out of line.

My country, Canada. :icon_conf
 

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Santo said:
My understanding is that the Racketeering charge is a catch-all

Somewhat, but the aim of the RICO laws is to combat "organized crime". Penalties are severe and include forfeiture of the proceeds of crime. No way they would do this against Bet365 but BOS is a different kettle of fish. BOS is being indicted as a criminal organization.
 

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Problem with confiscating funds is where do they keep them.... would they be able to force a UK bank to turn them over? A costa rican bank?
 

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