Don’t BetOnSports’ Former CEO

Though he is a British citizen and the company is based in the UK, the charges stem from his allowing the company to accept bets from the United States, where gambling online is technically illegal.

Carruthers is awaiting trial and will be staying under house arrest in a St. Louis hotel until that time.

The original 22- count indictment was handed down June 1 and charged a total of 11 people and four companies on various charges of racketeering, conspiracy and fraud. 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.

Also charged was BetOnSports founder Gary Stephen Kaplan who 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; 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 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 the aftermath of the indictments, BetOnSports fired Carruthers as its CEO and stopped taking bets from American markets, which accounted for about 75 percent of its business. The company also laid off 800 of its 1,100 employees and now must try to shift its strategy to Asia and Europe.

BetOnSports is also shuttering its offices in Antigua and Costa Rica, which handled bets from American players. The company must also return all account deposits to American players right away.

The U.S. Department of Justice believes online gambling is illegal  because of the 1961 Federal Wire Act. However, that is not necessarily the widely held belief in many U.S. courts, opening the door for Carruthers to be found not guilty on all charges. 

According to a story appearing on Forbes.com, no matter what the law is here in the U.S. it may not widely affect companies based offshore. "Even if prohibition comes into effect, I don't think there's anything the U.S. can do to these companies as long as you stay out of the country," says professor Joseph Kelly of the State University of New York at Buffalo, one of America's top consultants on the Internet gaming industry. "You can't enforce it. People will just use electronic cash entities like NETeller."

© Copyright 2006 Online Casino Crawler This material may not be published, broadcast, rewritten, or redistributed.

Vegas Casino Online brings the best progressive online casino games to your home,office or your preferred place to be.