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[h=1]Police, feds bust major North Texas gambling operation[/h]
By MATTHEW WATKINS
Staff Writer
Published: 16 August 2013 12:21 AM
PLANO — The guys meeting at sports bars and country clubs across North Texas probably didn’t have the look of a criminal enterprise.
But for more than a decade, the group of retired business executives and full-time bookies operated a massive illegal gambling ring, authorities say. Investigators estimate the men collected more than $5 billion in sports wagers over a four-year period.
They used the profits they earned to buy everything from condominiums to signed Tiger Woods golf shoes to gold coins.
On Thursday, Plano police and federal prosecutors announced that the group had finally been busted. After an investigation that lasted more than a decade, 18 men between the ages of 36 and 78 were prosecuted. More than $10 million worth of property was confiscated.
All of those arrested were involved in running the operation. No bettors were arrested.
U.S. Attorney John Bales called the bust “by far the largest bookmaking case in our district’s history.”
“The scope of it was dramatic,” said Bales, with the Eastern District of Texas. “It spread out all over the metroplex and many other states as well.”
In fact, the operation was international. Investigators said the group set up a company called Global Internet Corporation in the Caribbean island of Curacao. That company operated 25 separate sports betting websites. Each bettor was given a secret log-in to place wagers, authorities said. Winnings were then delivered through wire transfers or by cash through the mail.
The group had a distinct leader, 57-year-old Southlake businessman Albert Reed Jr. But it was operated by numerous “agents” who collected bets and kept track of customer care information, investigators said. The operation had a classic pyramid structure. Agents often made more money recruiting new bookies than handling the bets themselves.
It’s unclear how much money the Global Internet Corporation made over its entire lifespan. It was created in 2002. Authorities estimate that it generated about $200 million in earnings from January 2007 to February 2011.
“The money was easy, and they had contacts through their social settings that wanted to place bets,” said Assistant U.S. Attorney Andrew Stover, the lead prosecutor in the case.
UNDERCOVER WORK
A single anonymous note to the Plano Police Department led to the group’s downfall. Police Chief Gregory Rushin said the note sent in early 2001 named someone involved in “a significant gambling operation.”
Detective Curtis Coburn was assigned to the case. Rushin said Coburn went undercover and started making small bets with a single bookie. Gradually, he worked his way up to larger ones, all the while trying to gain the trust of the operators.
The investigation took years. Coburn handled it while working other cases. The attacks on Sept. 11, 2001, and other events forced him to put the inquiry aside for significant stretches. In all, he placed about 300 bets on baseball, football and other sports, authorities said.
Eventually, Rushin said, Coburn began to develop a picture of the organization, how it was run and how the money was distributed.
Around 2006, Plano police decided the case was too big for their department’s limited resources. They reached out to the federal government to help. Investigators with the Internal Revenue Service and U.S. attorney’s office obtained a court-ordered intercept that allowed them to secretly track how money was being funneled through the websites. By 2011, investigators had gathered enough paperwork on the group to fill “a section of an office building.”
They obtained 32 search warrants and began serving them in March 2011. At the time, Coburn had one bet left in the system — a 50-to-1 bet that the St. Louis Cardinals would be Major League Baseball champions. When the Cardinals beat the Texas Rangers in the World Series that year, it was too late to collect. The group had already been dismantled.
MILLIONS CONFISCATED
Of the 18 people prosecuted, only the leader, Reed, was sent to prison. He pleaded guilty to operating an illegal gambling business and received a sentence of one year and one day. He is set to be released next summer.
The rest of the participants received probation. Aside from tax violations, no other crimes were alleged.
Reed’s attorney, Robert Hinton Jr., described the case as “a victimless crime.”
“The participants were just really intelligent college graduates, high-class people who enjoyed gambling and bookmaking,” he said. “They were trying to do this in a legal way. They found out the hard way that there is no legal way to do this.”
Bales, the U.S. attorney, said the punishments were light because federal statutes related to gambling don’t carry heavy sentences. Instead, authorities went after the organization where it hurt — the pocketbook.
Court documents indicate that more than $4 million in cash was forfeited in the investigation. And about $6 million worth of property was confiscated.
At a news conference Thursday, authorities proudly displayed their bounty.
The meeting room at the Plano Police Department was lined with jerseys, golf shirts and helmets signed by famous athletes, including Earl Campbell, Tom Brady and Dirk Nowitzki. Also displayed were photos of gold pieces, bags of cash and luxury condominiums in Dallas and Las Vegas.
Those items will be auctioned off, with the proceeds going back to the investigating agencies.
The Plano Police Department alone will get about $4.8 million from the case. That money can’t legally be spent on the operating budget. Rushin said it will likely go toward new equipment and facilities.
It’s a windfall for a department that spent years chasing down the operation, he said.
“This all started with one single letter,” Rushin said. “Big things happen from small tips.”
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AT A GLANCE: GAMBLING CONVICTIONS
The following people have been convicted in connection with the major illegal gambling operation in North Texas:
• Albert S. Reed Jr., 57, of Southlake, convicted of violating the prohibition of illegal gambling business and sentenced to 12 months and one day in federal prison.
• Curtis W. Higgins, 45, of Prosper, convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to five years’ probation.
• David Mullins, 48, of Coppell, convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to five years’ probation.
• Dean Hartley Maddox, 69, of Houston, convicted of willful failure to file a tax return and sentenced to 18 months’ probation.
• Carl Francis, 71, of Dallas, convicted of violating the prohibition of illegal gambling business and sentenced to three years of probation, six months of home confinement and 200 hours of community service.
• Andrew Harris McElroy, 44, of Dallas, convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to three years’ probation.
• Steven Arnold Bell, 58, of Arlington, convicted of violating the prohibition of illegal gambling business and sentenced to two years’ probation and six months’ home detention.
• Neil Marcus Gerson, 51, of Frisco, convicted of violating the prohibition of illegal gambling business and sentenced to two years’ probation.
• Robert Primm, 71 of Fort Worth, convicted of a violation of willful failure to file a tax return and sentenced to six months’ probation.
• Charles Albert Brawner, 66, of McKinney convicted of engaging in monetary transactions in property derived from illegal gambling and sentenced to five years’ probation.
• Adam John Brady, 36, of Irving, convicted of violating the prohibition of illegal gambling business and sentenced to two years’ probation.
• William Craig Robertson, 42, of Rockwall, convicted of violating the prohibition of illegal gambling business and sentenced to three years’ probation.
• Thomas Applegate, 45, of Carrollton, pleaded guilty to violating the prohibition of illegal gambling business and is awaiting sentencing.
• William Michael Christopher, 56, of Fort Worth, pleaded guilty to violating the prohibition of illegal gambling business and is awaiting sentencing.
• Larry Dean Coralli, 78, of Addison, pleaded guilty to violating the prohibition of illegal gambling business and is awaiting sentencing.
• Brent Lee Coralli, 48, of Plano, pleaded guilty to violating the prohibition of illegal gambling business and is awaiting sentencing.
• Robert Roy Hodges, 71, of Dallas, pleaded guilty to violating the prohibition of illegal gambling business and is awaiting sentencing.
• Gregg Richard Merkow, 49, of Plano, pleaded guilty to violating the prohibition of illegal gambling business and is awaiting sentencing.
SOURCE U.S. attorney’s office for the Eastern District of Texas
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