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By Andrew M. Harris and Laurel Brubaker Calkins
Aug. 14 (Bloomberg) -- Gary S. Kaplan, the founder of the now-defunct Internet gambling firm Betonsports Plc who was indicted in 2006 for violating federal laws barring wagering, pleaded guilty to conspiracy and racketeering charges.
In a hearing today in St. Louis federal court, Kaplan admitted to multiple charges of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act. He agreed to serve 41 to 51 months in prison and forfeit $43.65 million, according to a Justice Department statement.
“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 FBI in St. Louis, said in the 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.’’
Kaplan and his company were accused of violating U.S. laws banning the interstate transmission of wagers by wire. He was arrested in the Dominican Republic in March 2007, nine months after his indictment, and has been in custody since then.
Now bankrupt, London-based Betonsports took in $1.25 billion in 2004, with 98 percent of that revenue coming from bets made through its Web site by U.S.-based clients. The company suspended trading of its shares on the London Stock Exchange on July 18, 2006, one day after the indictment was unsealed.
Binding Agreement
Today, Kaplan entered a binding plea agreement, which the judge must accept or reject unaltered at Kaplan’s Oct. 27 sentencing.
“This brings to an end a very controversial enforcement action,’’ Houston defense lawyer Dan Cogdell, who accompanied Kaplan in court, said in a phone interview. “Kaplan long believed that what he did was lawful; it was only in the last several years he recognized it wasn’t lawful. He’s made every effort to make amends.’’
Cogdell said the government agreed to drop additional charges if the judge accepts the plea deal. He said Kaplan should receive credit at sentencing for the two years he’s already spent in prison.
Since Kaplan’s indictment, Betonsports filed for liquidation and, in May 2007, entered a guilty plea to racketeering charges. The company, which has been settling claims with customers, hasn’t yet been sentenced by U.S. District Judge Carol E. Jackson, who is hearing the case.
Nine Other People
The indictment named the company, Kaplan, Chief Executive Officer David Carruthers and nine other people. The former CEO admitted to one count of racketeering conspiracy in April.
By June 23, all of the other individual defendants, including the founder’s siblings, Neil Scott Kaplan and Lori Beth Kaplan Multz, had pleaded guilty to criminal charges in the case, leaving their brother as the lone defendant facing trial.
More than $43.6 million was paid to the clerk of the court on Kaplan’s behalf on July 31, according to court records.
The case is U.S. v. Betonsports, 06cr337, U.S. District Court, Eastern District of Missouri (St. Louis).
To contact the reporters on this story: Andrew M. Harris in Chicago at [email protected] and; Laurel Brubaker Calkins in Houston at [email protected]
Last Updated: August 14, 2009 14:48 EDT
Betonsports? Kaplan Pleads Guilty in Gambling Case (Update1) - Bloomberg.com
Aug. 14 (Bloomberg) -- Gary S. Kaplan, the founder of the now-defunct Internet gambling firm Betonsports Plc who was indicted in 2006 for violating federal laws barring wagering, pleaded guilty to conspiracy and racketeering charges.
In a hearing today in St. Louis federal court, Kaplan admitted to multiple charges of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act. He agreed to serve 41 to 51 months in prison and forfeit $43.65 million, according to a Justice Department statement.
“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 FBI in St. Louis, said in the 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.’’
Kaplan and his company were accused of violating U.S. laws banning the interstate transmission of wagers by wire. He was arrested in the Dominican Republic in March 2007, nine months after his indictment, and has been in custody since then.
Now bankrupt, London-based Betonsports took in $1.25 billion in 2004, with 98 percent of that revenue coming from bets made through its Web site by U.S.-based clients. The company suspended trading of its shares on the London Stock Exchange on July 18, 2006, one day after the indictment was unsealed.
Binding Agreement
Today, Kaplan entered a binding plea agreement, which the judge must accept or reject unaltered at Kaplan’s Oct. 27 sentencing.
“This brings to an end a very controversial enforcement action,’’ Houston defense lawyer Dan Cogdell, who accompanied Kaplan in court, said in a phone interview. “Kaplan long believed that what he did was lawful; it was only in the last several years he recognized it wasn’t lawful. He’s made every effort to make amends.’’
Cogdell said the government agreed to drop additional charges if the judge accepts the plea deal. He said Kaplan should receive credit at sentencing for the two years he’s already spent in prison.
Since Kaplan’s indictment, Betonsports filed for liquidation and, in May 2007, entered a guilty plea to racketeering charges. The company, which has been settling claims with customers, hasn’t yet been sentenced by U.S. District Judge Carol E. Jackson, who is hearing the case.
Nine Other People
The indictment named the company, Kaplan, Chief Executive Officer David Carruthers and nine other people. The former CEO admitted to one count of racketeering conspiracy in April.
By June 23, all of the other individual defendants, including the founder’s siblings, Neil Scott Kaplan and Lori Beth Kaplan Multz, had pleaded guilty to criminal charges in the case, leaving their brother as the lone defendant facing trial.
More than $43.6 million was paid to the clerk of the court on Kaplan’s behalf on July 31, according to court records.
The case is U.S. v. Betonsports, 06cr337, U.S. District Court, Eastern District of Missouri (St. Louis).
To contact the reporters on this story: Andrew M. Harris in Chicago at [email protected] and; Laurel Brubaker Calkins in Houston at [email protected]
Last Updated: August 14, 2009 14:48 EDT
Betonsports? Kaplan Pleads Guilty in Gambling Case (Update1) - Bloomberg.com