An announcement yesterday from the United States Attorney for the Eastern District of Missouri, Catherine L Hanaway, stated that BetonSports PLC has pleaded guilty to federal racketeering charges. In return for no further criminal charges being brought, the company will supply witnesses and evidence in the pending cases against co-defendents, including former chief executive David Carruthers and founder Gary Kaplan. BetonSports faces a fine of up to US$500,000 or more and possible forfeitures, and is required to repay money received from US gamblers and held since 1 June 2006.

The racketeering activity admitted by the company includes contravening the Wire Wager Act, committing Mail Fraud and Wire Fraud, operating an illegal gambling business, undertaking interstate travel in aid of a racketeering enterprise, interstate transportation of gambling paraphernalia and money laundering. By acquiring the business enterprises that were part of the Kaplan Gambling Enterprise, BetonSports is said to have knowingly taken over Gary Kaplan’s illegal sports betting business that started in the New York area in the early ‘90s.

“This plea, combined with the terms of the civil junction, should put an end to the BetonSports illegal gambling empire,” said U.S. Attorney Hanaway. “BetonSports, PLC is presently the corporate parent, based in the United Kingdom, of the companies comprising the vast illegal internet gambling operations described in the indictment. BetonSports, PLC had been failing to appear and answer the criminal charges in the indictment and Judge Jackson had imposed sanctions against the company. This plea constitutes a submission by the company to the U.S. justice system.”

Previously BetonSports had claimed that Hanaway had no jurisdiction over it as a foreign company processing wagers in Costa Rica and elsewhere. The plea agreement means that the company now will submit to the US justice system. The arrest of Carruthers last July in Texas while awaiting a connecting flight to Costa Rica heralded the start of the US crackdown on online gaming. In August BetonSports closed its US business which accounted for around 95% of the company’s profits. The company is now seeking liquidation under UK law due to insolvency. (E-05.25.07)

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