The founder of Betonsports.com is one of 11 people, along with four corporations, indicted on charges of racketeering, conspiracy and fraud in a crackdown on online gambling, the U.S. Department of Justice said Monday.
The indictment, returned June 1 and unsealed Monday, included charges against Betonsports PLC, a publicly traded holding company that owns Internet sports books and casinos. A federal grand jury in the Eastern District of Missouri returned the indictments.
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 Act, interstate transportation of gambling paraphernalia, interference with the administration of Internal Revenue Service laws and tax evasion, the Justice Department said.
Other defendants in the racketeering conspiracy include Kaplan’s siblings, Neil Scott Kaplan and Lori Kaplan Multz; David Carruthers, CEO of BetonSports.com; and Peter Wilson, media director for BetonSports.com. The three other charged companies, all based in Florida, are Direct Mail Expertise, DME Global Marketing and Fulfillment and Mobile Promotions.
BetonSports.com didn’t immediately return an e-mail seeking comment on the charges.
After Gary Kaplan was arrested on New York state gambling charges in May 1993, he moved his betting operation to Florida and eventually to Costa Rica, the indictment says. BetonSports.com, the most visible outgrowth of Kaplan’s sports bookmaking business, misleadingly advertised itself as the “world’s largest legal and licensed sportsbook,” the Justice Department said.
Kaplan failed to pay federal wagering excise taxes on more than $3.3 billion in wagers taken from the United States, and the Justice Department is seeking to recover $4.5 billion and property from Kaplan and his co-defendants.
The indictment alleges that Gary Kaplan and partner 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 Justice Department alleges that the defendants agreed to conduct their business 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.
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, the Justice Department said. Five other defendants are in custody.
