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Internet Gambling CEO Arrested by FBI
Posted by
Zonk
on Tue Jul 18, 2006 09:25 AM
from the anyone-hear-a-historical-echo dept.
from the anyone-hear-a-historical-echo dept.
tightpoker writes to mention the news that several key individuals associated with online gambling site BetonSports have been indicted in a Missouri courtroom. Founder Stephen Kaplan, CEO David Carruthers, 9 other people and four corporations have been charged with crimes ranging from racketeering to fraud. The Sunday Time reports on the story as well, addressing fears this may be a prelude to a crackdown on all online gambling by U.S. law enforcement. From the article: "Nigel Parson, leisure analyst at Williams de Broë, said the move would 'throw online gambling stocks into a spin,' adding: 'David Carruthers is a prominent advocate of online gambling. The fear that this is an escalation of the anti-lobby will trouble markets.' Greg Harris, an analyst at Cannacord, said: 'It is too early to say if this is part of a broader strategy on prevention of internet gambling in the U.S. or if it is the Department of Justice flexing their muscles and trying to influence legislation.'"
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Oy ve... (Score:4, Interesting)
Re:Oy ve... (Score:5, Interesting)
It rachets up the pressure on the Senate to pass a bill outlawing internet gambling in the United States of America.
It suggests to the Average-internet-gambling-Joe that 'he might be next'
It fscks up the stock prices of these online gambling companies.
As always, if you've got the time, hit up Google News
http://news.google.com/news?q=gambling+arrest [google.com]
Some random snippets
"The Justice Department is seeking the forfeiture of $4.5 billion, cars and computers from the defendants, including Betonsports PLC and three other companies."
"Several of the defendants live outside the United States, which will make them hard to catch, said U.S. Attorney Catherine Hanaway in St. Louis."
"Last week, the House passed a bill that would make it illegal for American banks and credit card issuers to make payments to online gambling sites. The bill's fate in the Senate is uncertain, in part because of exemptions granted for horse racing and state lotteries."
Here's The Truth (Score:5, Insightful)
Control. That's what it's all about.
Hey Authorities... (Score:4, Funny)
Watch the share price fall (Score:5, Informative)
It's only a matter of time (Score:5, Insightful)
Re:It's only a matter of time (Score:5, Funny)
Also, with midterm elections looming, it doesn't hurt for the Republicans to crack down on some 'immoral' activity to appease their 'values' voters.
Re:It's only a matter of time (Score:5, Insightful)
Re:It's only a matter of time (Score:3, Interesting)
Re:It's only a matter of time (Score:2, Interesting)
Completely off topic, but out of curiosity...
Where, in the bible, does it say anything about the moral
Re:It's only a matter of time (Score:2, Interesting)
Suddenly, "magic golden plates" don't seem so crazy, do they
Re:It's only a matter of time (Score:5, Informative)
Question: "What does the Bible say about gambling? Is gambling a sin?"
Answer: Gambling can be defined as "risking money in an attempt to multiply the money on something that is against the odds." The Bible does not specifically condemn gambling, betting, or the lottery. The Bible does warn us, however, to stay away from the love of money (1 Timothy 6:10; Hebrews 13:5). Scripture also encourages us to stay away from attempts to "get rich quick" (Proverbs 13:11; 23:5; Ecclesiastes 5:10). Gambling most definitely is focused on the love of money and undeniably tempts people with the promise of quick and easy riches.
In that case..... (Score:3, Funny)
If getting rich quick and love of money are sins, then certainly gambling,
which in the long run makes you poorer, is a Good Thing.
In fact the state lotteries, indian Casonos, and the online gambling sites, perf
Re:It's only a matter of time (Score:4, Insightful)
Under that premise, we should outlaw:
Buffets -> ever seen the size of the fat bastards at a Buffet? Those poor fat bastards are doomed if they continue to eat at that rate.
Candy -> sure it's okay once in a while, but causes tooth decay
Alcohol -> it's the scourge of society - too much alcoholism
Casino Gambling -> wtf is the difference between gambling online and gambling in a casino? Only difference I see is the greedy govt doesn't get a cut. Tough shit for them for not legalizing internet gambling IMO.
Sex -> too many pervs out there that can't control themselves. We should sterlize everyone.
I realize that I'm drawing a slippery slope, but I'm just doing it to prove a point. Truth is, some people just can't control themselves with anything, and we shouldn't outlaw choice.
Stupid Logic (Score:2, Interesting)
No, sorry - revenue has nothing to do with this. It's "What about the children" syndrome running rampant again.
Re:Stupid Logic (Score:4, Insightful)
Re:Stupid Logic (Score:3, Insightful)
Re:It's only a matter of time (Score:5, Insightful)
Re:It's only a matter of time (Score:4, Informative)
Of course they lost (Score:5, Insightful)
So it's no wonder that online gambling sites lose, and will continue to lose in court. You've got to pony up to the bosses if you want to work in this town. (Preferably, both Democrats and Republicans.)
Re:Of course they lost (Score:5, Interesting)
There are numerous "cashless" casinos in my area. There was a surge of them. You bought a monthly membership, vouchers, however each one chose to set up, and you would compete for material prizes such as televisions, event tickets, and so on. Most of these casinos also donated 10% of their monthly earnings to charities.
The problem came about first when the local government realized they weren't getting anything special from these gambling halls, and when a small, small, small yet vocal group protested them, saying how their significant others were throwing away large amounts of money to be part of these casinos. This group launched a campaign and instead of seeking help for their loved ones, just wanted the places shut down. Not getting a lot of incentive from the casinos themselves, pressure was put on. I believe only two of the "game rooms" are still in business now.
My question... (Score:5, Interesting)
Before I jump to conclusions, my question is this: Are they really guilty of fraud and racketeering (very serious crimes that should be severely punished), or is this just an excuse to try to stop online gambling? I would be interested in seeing and hearing the evidence that gets presented before making up my mind.
Of course, both sides are going to claim what will support their viewpoint.
On the one hand, the DoJ has been itching for any excuse to go after these folks for a long time, which doesn't help the perception of them. If they had remained legally neutral to the matter and just stuck to what the law says, I sure would be more comfortable that they actually have our best interest at heart and that they're not just pandering to right-wing nutcases.
On the other, the online gambling industry is one that is notoriously rife with fraud, and it's entirely possible that these guys are scum that have been doing what they're accused of or worse. For the sake of their industry, I hope that they have realized the scrutiny that they've been under and have made very diligent efforts to stay clean and legitimate and can prove so in court. Otherwise, these two may very well have doomed their entire industry, even the players that are 100% honest and that just want to provide an entertainment service.
I think that the most telling sign of what the truth is is whether the DoJ starts chasing down all online gambling houses for "fraud" and "racketeering." At any rate, it will be interesting to see how it all turns out.
Re:My question... (Score:3, Interesting)
Amazing (Score:3, Insightful)
Re:Yes, Amazing (Score:3)
What does "bread and circuses" have to do with D and D? Bread and circuses was the Roman Empire's way of keeping the masses in check by keeping their minds off of the real issues. As long as the every day Roman had plenty of bread (food) and plenty of ch
"Harm legitimate business"? (Score:4, Insightful)
I don't see how Internet Gambling could harm legitimate business...
Re:"Harm legitimate business"? (Score:5, Interesting)
It is a legitimate business. At least, it is here in the UK, and in most other countries.
The US makes laws that criminalize activities by non-US citizens that take place entirely outside the US. How else could David Carruthers have been arrested, when his business is based in Costa Rica?
Re:"Harm legitimate business"? (Score:3, Insightful)
He used to be a New York bookie, until he got arrested for something or other gambling related and decided to leave the country.
What about self regulation (Score:2)
Only in Unix-speech less i
Yeah. right. (Score:5, Interesting)
I'm from Missouri, and I know who those legitimate businesses are. Harrahs, Ameristar, The Casino Queen, and The President. And I bet (pardon the pun) that I know who they donate to. I'm looking at you, Catherine Hanaway.
The problem is this... (Score:3, Interesting)
Then they run out of those.
Next they go after big fish in the online gambling market who are operating outside the US.
Other governments tell US to go DIAF
US sees the only other way to address problems as going after the gamblers instead.
US uses this as a reason to further OK tracking all internet traffic.
We know where that goes.
There's no good outcome from this path. But greed will drive politicians to it.
missing the point? (Score:4, Insightful)
A lot of the comments revolve around the obligatory "here goes the government again" comments.
Perhaps I'm a bit naive, but it seems obvious to me that jumping on some website hosted in some third-world country and giving them my credit card so I can play poker through some system controlled by the website against God-knows-who just seems like an invitation to get ripped off.
I'm just not surprised in the least bit to hear some online gambling site shut down or involved parties being arrested for fraud or whatever. Frankly, I'm surprised it's taken this long for some government somewhere to actually look at these sites and realize that there is no way at all to stop the owners thereof from ripping off customers coming and going (aside from the massive amounts of money they make simply from the actual gambling itself).
I've got one of the smallest lists of "things I love that our government has its fingers in", but you should also realize that along with the money the government collects around legalized gambling in the US, they also regulate it massivly and crack down fast and hard on places that are ripping people off (above the fact that gambling itself is a ripoff).
- dmRe:missing the point? (Score:3, Insightful)
Re:missing the point? (Score:3, Insightful)
I'm a little confused. Those games ARE al
This is NOT a gambling case (Score:3, Informative)
Apearently there IS NO LAW against on-line gambling possably there are some state laws but the FBI does not enforce state laws. These guys could have been sell shoes buti f they cheated customers and didn't pay taxes they be shut down just the same --- well likey not the FBI does not waste time with small scale crimes and I doubt they'd be selling $3 billion in shoes
Even the Porn industry is mostly above board and gets the required permits, pays resonable wadges, takes out payroll and income tax withholdings and keeps books and pays taxes. on-line gambling could do the same but apearently these guys didn't. This is NOT a big deal.
This applies to sports betting, not casino games (Score:3, Informative)
In February 2001, Judge Stanwood Duval of the US District Court in New Orleans ruled "'in plain language' [the Wire Act] does not prohibit Internet gambling 'on a game of chance.'"
On November 21, 2002, the US Fifth Circuit Federal Appeals Court upheld Duval's ruling, stating: "The district court concluded that the Wire Act concerns gambling on sporting events or contests... We agree with the district court's statutory interpretation, its reading of the relevant case law, its summary of the relevant legislative history, and its conclusion."
The Appeals Court further states: "Because we find neither the Wire Act nor the mail and wire fraud statutes may serve as predicates here, we need not consider the other federal statutes identified by the Plaintiffs... As the district court correctly explained, these sections may not serve as predicates here because the Defendants did not violate any applicable federal or state law."
The Appeals Court specifically cites Duval's statement: "[A] plain reading of the statutory language [of the Wire Act] clearly requires that the object of the gambling be a sporting event or contest." This is very explicit language. You would have to jump through a lot of mental hoops to consider the playing of online poker to be "a sporting event".
Finally, in November 2004, the Caribbean island nation of Antigua and Barbuda won a World Trade Organization ruling that United States legislation criminalizing online betting violates global laws. In April 2005, the WTO Appellate Body affirmed the principal conclusions involved. What effect this will have on the U.S. morality police has yet to be seen, probably none, but at least it gives the online poker players and gamblers some glimpse of hope.
Personally, I don't really care about sports betting and related things being illegal, as that isn't my area of interest. But I do see a long slippery slope ahead if things like this continue.
Source: http://www.playwinningpoker.com/online/poker/lega
Wow... (Score:4, Interesting)
It's not the first time something like this has happened though. I seem to recall the FBI arresting a bunch of USAians who'd set up offshore gambling sites a while back. And if you ever had anything to do with helping to break copyright protection encryption you'd best steer clear of this country. If you've ever worked on an OSS encryption product you might want to avoid the USA, too. Never know when our guys might get a bug up their ass and arrest you as an international arms distributor or something like that.
As for the US Citizens, you ARE registering to vote and voting against the incumbent, right? Chances are the guy you're voting against is retarded. Chances are the guy you're voting for is too, but it'll be a few years before he establishes the ties to do much damage and by then you can help vote him out again.
Hmmm (Score:3, Insightful)
* NO bail
* feds are seeking over $4 billion in unpaid taxes
* Carruthers was targeted as part of a larger investigation
* Carruthers was held incommunicado until appearing at trial
* FULL TEXT of the fed press release announcing the indictment details
The news from the past few days made it seem like they were just leaning on Carruthers to help with the Kaplan investigation. But some of this stuff is very broad... "equipment used to place bets" is probably just a server. Sounds like he will be away for quite a while.
YRO (Score:5, Insightful)
Right now, there is no such thing as legal online gambling in the US. Because of that, all online gambling businesses are breaking the law. This particular case might be cut and dry, but the larger issue of our rights online can still be debated.
I think gambling is a tax on people who are bad at math, and should be 100% legal.
Re:YRO (Score:5, Insightful)
Right now, there is no such thing as legal online gambling in the US. Because of that, all online gambling businesses are breaking the law.
wait one minute there.... the absence of a law legalizing online gambling does not, in fact, make the activity illegal. There's no law legalizing mowing your yard (oh God, at least I hope there's not!), but it is legal to do so. IMO, gambling is something should remain regulated at the state level regardless.
On the other hand, I'm not a lawyer. Maybe the Federal government has a law criminalizing online gambling. But it seems like these guys are (like most of the "gambling bad guys" from yesteryear) getting hit with TAX law. That doesn't make online gambling illegal, the Feds have just make it impossible to run an online casino AND pay federal wager taxes on the income. Who's the real crook? Note they're dragging years of non-online gambling into this story as well, trying to make a case against online gambling by throwing traditional bookmaking in the mix.
For me, if they get these guys for not paying US wager taxes on gambling wages placed by US citizens, then any online retailer who only collects Sales Tax for the state their entity exists in should be charged with racketeering too.
Re:YRO (Score:3, Insightful)
Re:offtopic? (Score:5, Informative)
Of course you did not read the article! (Score:2)
Re:offtopic? (Score:2)
Re:offtopic? (Score:2)
"Racketeering" is a generic term for "heading a criminal enterprise." Illegal gambling falls under that umbrella - but no one was forcing the gamblers to pla
Re:What's the penalty interest? (Score:2)
Re:Why was he in the US? (Score:2)
He was living outside the US. He was changing
Re:Why was he in the US? (Score:5, Informative)
RTFA (and the moderator that marked your posting insightful should do the same).
Carruthers was arrested by FBI agents in Dallas on Sunday afternoon as he was returning to his home in Costa Rica from a trip to the United Kingdom.
Re:Why was he in the US? (Score:3, Insightful)
The US is different, it requires immigration... (Score:3, Informative)