Reprinted from Caribbean Net News
caribbeannetnews.com

US cracks down on Antigua internet gambling operation

Wednesday, July 19, 2006

by: Rob Lever

USA (AFP), WASHINGTON: Eleven people have been charged in a US crackdown on a multibillion-dollar Internet sports betting website with operations in Antigua and elsewhere, prosecutors said.

An indictment unsealed Monday charges the operators, British-incorporated BetOnSports, with illegally taking bets from US residents and failing to pay US taxes on 3.3 billion dollars in wagers from the United States.

Five of those indicted, including the British head of BetOnSports, have been arrested on the charges since the indictment was returned June 1, the Justice Department said.

US authorities were seeking extradition of the others charged in the scheme, as well as the forfeiture of 4.5 billion dollars in assets.

A federal judge in Missouri on Monday issued a temporary restraining order against BetOnSports that prevents the group from accepting wagers from the United States, with a hearing set within 10 days.

The indictment charges the 11 with violations of the Wire Act on interstate gambling, racketeering and tax evasion.

The crackdown highlights the effort in the United States to enforce a ban on Internet gambling even though most of the sites taking bets are offshore.

According to some reports, Americans place over half of all online bets. The American Gaming Association said that last year, US residents bet more than four billion dollars at offshore sites.

The US clampdown has strained relations with the Caribbean state of Antigua and Barbuda, a hub for Internet gambling, which has brought the matter to the World Trade Organization.

One of the key persons indicted was Gary Kaplan, founder of the site. A US resident who had been arrested in 1992 for illegal sports betting, he later moved his operations to Aruba and then Antigua. A warrant was issued for his arrest.

Others indicted included Kaplan's brother Neil Kaplan and sister Lori Kaplan Multz.

Also charged was David Carruthers, a Briton and chief executive officer of BetOnSports.com. Officials said he was in custody in Texas.

Others indicted were identified as Peter Wilson, Norman Steinberg and Tim Brown, all involved with BetOnSports.com; and four people involved in a Florida firm known as the Lenis companies that provided services to the betting site: William Hernan Lenis; Monica Lenis, Manny Gustavo Lenis and William Luis Lenis.

"The United States will seek extradition of all defendants to St. Louis (Missouri) for prosecution," a Justice Department statement said.

"Illegal commercial gambling across state and international borders is a crime," said US Attorney Catherine Hanaway.

"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 the websites took bets from undercover federal agents in St. Louis who used undercover identities to open wagering accounts.

It also alleges that the defendants illegally transported equipment used to place bets and transmit wagering information across state lines and shipped equipment to Costa Rica from Florida for that purpose.

Authorities said the operation including wagering websites based in Panama, Antigua, Costa Rica and elsewhere, while advertising in the United States that their gambling operation was "legal and licensed."

According to the indictment, some of the funds for the gambling were sent to accounts in Ecuador.

US officials are trying to seize some 4.5 billion dollars in assets of the companies, as well as vehicles, computers, cell phones and other equipment from the enterprise.

Print Page