Others at the online gambling site face trial in September
The former director and CEO of now defunct sports betting site BetonSports.com has pleaded guilty to racketeering charges related to running an illegal gambling operation and using money from customer accounts to support its operations, the U.S. Department of Justice announced.
U.K. native David Carruthers, age 51, pleaded guilty Wednesday in U.S. District Court for the Eastern District of Missouri. The racketeering conspiracy he participated in cost more than 250 victims between US$7 million and $20 million, the DOJ said in a news release.
Carruthers faces maximum penalty of 20 years in prison and fines of up to $250,000. Sentencing is scheduled for Oct. 2
“Illegal sports gambling across state and international borders by telephone or internet is a crime,” Catherine Hanaway, U.S. attorney for the Eastern District of Missouri, said in a statement. “Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses.”
Carruthers was hired by owner Gary Kaplan in mid-2000 as CEO of BetonSports.com, a sportsbook organization based in Costa Rica.
While Carruthers worked for BetonSports.com, the organization made false statements in advertising to its potential customers suggesting its Internet and telephone gambling operations were legal and licensed, the DOJ said. The business failed to disclose that the U.S. government and many state governments viewed such operations as illegal.
In addition, BetonSports.com told customers that money in their accounts was safe and readily available, when the company was using the funds to support and expand its operations, including the purchase of Easybets. When BetonSports ceased operations in July 2006, it was unable to pay $16 million to customer accounts, the DOJ said.
“Gambling is not a victimless crime, especially when the Internet is used with its global reach,” said Toni Weirauch, special agent in charge of the U.S. Internal Revenue Service’s criminal investigation unit. “IRS has focused its attention on offshore activities through the enforcement of tax, money laundering and other related financial criminal statutes within its jurisdiction.”
Kaplan, age 50, is charged with numerous felony violations of federal laws including the Wire Act, Racketeer Influenced and Corrupt Organizations (RICO) Conspiracy, mail fraud, and interstate transportation of gambling paraphernalia. He and four codefendants are facing trial in September 2009.
