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BetOnSports founder pleads guilty to racketeering
- — 17 August, 2009 05:47
The founder of Internet- and telephone-based gambling operation BetOnSports has entered guilty pleas to three U.S. charges, including a racketeering charge, the U.S. Department of Justice said Friday.
Gary Stephen Kaplan, age 50, will forfeit US$43.7 million to the U.S. government as part of a plea agreement, the DOJ said. He pleaded guilty Friday to charges of conspiracy to violate the U.S. RICO (Racketeer Influenced and Corrupt Organizations) statute, conspiring to violate the Wire Wager Act and violating the Wire Wager Act, the DOJ said.
The Wire Wager Act generally prohibits gambling businesses from using wired communications to take bets.
Under the plea agreement, Kaplan would serve between 41 and 51 months in prison.
Kaplan authorized the wire transfer of $43.7 million from a Swiss bank account to the U.S. District Court for the Eastern District of Missouri about a week ago, the DOJ said.
In his guilty plea, Kaplan said that beginning in the mid- to late-1990s, he set up businesses in Antigua and later Costa Rica to provide sports betting services to U.S. residents through Web sites and toll-free telephone numbers, the DOJ said.
Kaplan's BetOnSports advertised "heavily" in the U.S., the DOJ said.
Kaplan's toll-free telephone lines terminated in Houston or Miami, and then were forwarded to Costa Rica by satellite transmitter or fiber-optic cable. Some of Kaplan's Web servers were located in Miami and were remotely controlled from Costa Rica. People became customers by depositing money in a BetOnSports account.
By 2004, the BetOnSports organization's principal base of operations in Costa Rica employed about 1,700 people. In the year before Jan. 13, 2004, BetOnSports had nearly 1 million registered customers and accepted more than 10 million sports bets exceeding $1 billion, the DOJ said.
Kaplan has been in custody without a bond set since his arrest in March 2007. Sentencing has been set for Oct. 27, 2009.
"Gary Kaplan made millions of dollars by making it too easy for people to gamble away their hard earned money without having to leave their homes," John Gillies, special agent in charge of the Federal Bureau of Investigation in St. Louis, said in a statement.
"Today's guilty plea should have a lasting effect because Kaplan was not only the founder of BetOnSports, he was also one of the pioneers of illegal online gambling."