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Poker News | Gambling and the Law

USA Charges 12 Men in Online Gambling Sting

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US Attorney’s offices have been busier than ever in their dogged pursuit of illegal online gambling companies. Over the last 18 months, US attorneys across the land have been bringing charges against businesses that offer money transfer services associated with online gambling. New York, Florida, Louisiana and Missouri are a few of the locations where companies and executives have been targeted for prosecution.

The latest crackdown is in New York, where 12 men have been charged with money laundering and illegal gambling. The US attorney for the Southern District of NY brought the charges against the men, accusing them of running a multi-million dollar sports betting website since 2005, which was based in Costa Rica.

The 12 recently charged men are said to have helped run websites that provided accounting services and an off shore call center. The sites supposedly catered to illegal sports bookies in the US. Although the men were not found to be taking bets or paying out winnings, they are accused of charging bookies a fee to register their clients on the websites. Once registered, the clients of the bookies could then place illegal bets online or via the telephone. According to the indictment, one of the websites named was Outside of Nevada, betting on sports in the USA is illegal, with the exception of horse and dog racing.

The case is being handled by the Organized Crime Unit of the US Attorneys Office, who announced that although 12 men have been charged, only eight so far have been arrested. One of the men still at large is the supposed leader of the operation, Carmen "Buddy” Cicalese. Some of the other men named in the indictment sound like they stepped out of the movie “Goodfellas” and sport monikers like Marc "Box” Group, Louis "Lou the Shoe” Santos, and Carl "Sheepshead” Muraco.

In July of last year, the USA’s determination of prosecuting those associated with online gambling was brought to light, with the arrest of David Carruthers.

The indictment for Carruthers claims he was the former CEO of BetonSports, an online gambling company listed in the UK, but based in Costa Rica. Although Carruthers is a British citizen, he is currently being held in Missouri, where he is awaiting trial. At the time of Carruthers arrest, the Unlawful Internet Gambling Enforcement Act (UIGEA) had not even been signed into law, a fact which seems to have no bearing in the case against him.

Online gambling companies such as Betonsports thought they could escape prosecution in the US by basing their operations in offshore locations like Costa Rica. Authorities in the US however continue to root out and prosecute the gambling companies and those associated with them, whenever they step upon American soil. This practice is drawing international criticism, with the US being accused of unfairly targeting foreign businesses and breaking World Trade Organization rules.

When the UIGEA went into effect, most online gambling companies pulled out of the lucrative US market, hoping to avoid prosecution.

Joe Kelly, a law professor at Buffalo University, commented about the prosecution of online gambling companies, “If everything is done offshore, there is still a gray area. If you are dumb enough to do anything in the United States, you are asking for trouble.”

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