Headline
Gaming News
BETonSPORTS CEO Detained
After Brief
Appearance in Federal District Court
WASHINGTON -- July 18th, 2006 -- A federal grand jury in the Eastern
District of Missouri has returned a 22-count indictment charging
11 individuals and four corporations on various charges of racketeering,
conspiracy and fraud, the Department of Justice announced today.
The indictment was returned on June 1, 2006, and unsealed today.
BetonSports PLC (BSS.L),
a publicly-traded holding company that owns a number of Internet
sportsbooks and casinos, was among the companies charged in the
indictment. 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 (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;
David Carruthers, chief executive officer of BetonSports.com; 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 started his gambling enterprise
via operation of a sportsbook in New York City in the early 1990s.
After Kaplan was arrested on New York state gambling charges in
May 1993, Kaplan moved his betting operation to Florida and eventually
offshore to Costa Rica. According to the indictment, BetonSports.com,
the most visible outgrowth of Kaplan's sports bookmaking enterprise,
misleadingly advertised itself as the "World's Largest Legal
and Licensed Sportsbook." The indictment also alleges that
Kaplan failed to pay federal wagering excise taxes on more than
$3.3 billion in wagers taken from the United States and seeks forfeiture
of $4.5 billion from Kaplan and his co-defendants, as well as various
properties.
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 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. U.S. District Judge Catherine D. Perry issued
the temporary restraining order today. A hearing in the civil case
has been requested within 10 days. As authorized by federal statute,
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. Neil Kaplan, 40, is in custody in Ft. Pierce, Florida.
Carruthers, 49, a resident of Costa Rica and Bromsgrove, Worcestershire,
England, is in custody in Ft. Worth, Texas. William Luis Lenis and
Manny Gustavo Lenis are in custody in Miami. Tim Brown was arrested
near Philadelphia. Warrants have been issued for the other defendants
not currently in custody. The United States will seek extradition
of all defendants to St. Louis for prosecution.
The charges are the result of a joint investigation by Internal
Revenue Service Criminal Investigation and the Federal Bureau of
Investigation. 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. The Florida Department of Law Enforcement, the Tampa
Police Department, the Jacksonville, Fla. Sheriff's Office, and
NFL Security and NCAA Enforcement Office personnel also assisted
in the investigation.
The charges set forth in an indictment are merely accusations,
and each defendant is presumed innocent until and unless proven
guilty.
Editor's Note: At the request of the company, trading on AIM
for the above-mentioned securities has been temporarily suspended
from 18/07/2006, at 7:50am, pending an announcement.
The Board of BetonSports plc ( "BETonSPORTS " ) can update
their announcement of 17 July concerning the detention at Dallas
airport of its CEO David Carruthers by US Federal authorities. After
being informed of his original detention at Dallas Airport late
on the evening of Sunday 16 July UK time, unsuccessful attempts
on the Board's behalf were made to contact US officials during Sunday
night to clarify the position. The Board have not been able to contact
David Carruthers other than through his US Counsel but late on the
evening of 17 July, the company obtained a copy of an indictment
which was unsealed by the US Department of Justice alleging various
criminal acts against multiple defendants which include BETonSPORTS
and its subsidiaries and David Carruthers as well as various individuals
and corporations. Other than David Carruthers, the other defendants
are not involved in the management of BETonSPORTS.
The Board have also noted that in a Press Release issued by the
Department of Justice in the course of the evening of 17 July UK
time, reference is made to a temporary restraining order having
been obtained by the US Department of Justice against BETonSPORTS.
The release states that a civil complaint has been filed in federal
court to obtain an order requiring BETonSPORTS to stop taking sports
bets from the United States, and to return money held in wagering
accounts to account holders in the United States and that a temporary
restraining order was issued yesterday. A hearing in the civil case
has been requested within 10 days. Reference is also made to the
FBI issuing letters to four telephone companies, instructing them
to stop providing phone service to the Internet sportsbooks and
casinos operated by BETonSPORTS.
The Board, to their knowledge, have not been served with a copy
of the terms of the referred temporary restraining order and the
Board will make further urgent enquiries with the relevant US officials
in the course of today to clarify the position.
The Board have in the meantime been reviewing with their lawyers
the impact of the indictment and are considering the serious business
impact of the temporary restraining order on its business and that
review is continuing. Given the issues and uncertainties involved,
until the review is complete and a fuller announcement can be made
resolving the uncertainties concerning the future of the Company,
the Board has requested the London Stock Exchange to suspend trading
in the company's shares.
Contact:
Ginny Pulbrook, Citigate Dewe Rogerson
Telephone: +44 (0)20 7282 2945
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