Neil Scott Kaplan, Lori Kaplan-Multz, and Penelope Tucker have all pled guilty to U.S. District Court Judge Carol E. Jackson, according to an article published by Bloomberg on Tuesday. Now, BetOnSports Founder Gary Kaplan faces trial on September 21st.
Former BetOnSports Chief Executive Officer (CEO) David Carruthers pled guilty in April and faces up to 33 months behind bars. Carruthers’ sentencing is scheduled for October. A statement released by iGamingNews at the time noted that Carruthers planned to cooperate against others who were still being held by the U.S. Department of Justice. Now, only Kaplan remains. The other defendants pled guilty to “racketeering conspiracy and the illegal transmission of bets,” according to Bloomberg.
Kaplan was arrested in the Dominican Republic in March of 2007. An article published by BBC News two years ago noted that BetOnSports reaped 95% of its profits from U.S. residents and exited the market in August of 2006. That October, the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law by then-U.S. President George W. Bush. The measure prohibited the transfer of funds from banks and other financial institutions to illegal internet gambling outfits, although it failed to specify what activities were permissible. The regulations of the UIGEA were approved as “midnight rules” in November and implemented on January 19th, one day before President Barack Obama took office. The financial services industry must come into full compliance with the UIGEA by December 1st.
Carruthers was kept under house arrest in St. Louis after being picked up by U.S. authorities in Texas in 2006. According to Bloomberg, Kaplan faces charges of “racketeering conspiracy, mail fraud, and wire fraud.” His brother, Neil, told Judge Jackson, “Having seen my brother’s companies advertised openly on billboards in New York and other places, I believed his company was lawful.” His sister, Lori, pled guilty to “racketeering conspiracy and the illegal transmission of wagers,” according to the U.S. news outlet.
The St. Louis Post-Dispatch noted that Neil, Lori, and Tucker each will fork over money held in Swiss bank accounts as part of the agreement. The former two will spend time in a halfway house, but not be imprisoned for soliciting U.S. customers. Tucker will receive a one year probation and pay $15,000. The Post-Dispatch explained, “Assistant U.S. Attorney Steve Holtshouser said the sentences reflect the minimal roles that Neil Kaplan and Kaplan-Multz played, their lack of decision-making power there, and their willingness to surrender their BetOnSports money.”
Party Gaming entered into a non-prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York in April. As part of its agreement, the company agreed to pay a $105 million fine over a three and a half year period. In December, one of its co-founders, Anurag Dikshit, admitted to violating the Wire Act of 1961 in a New York courtroom. He faces up to three years behind bars and will be sentenced later this year. Dikshit is in the process of paying a $300 million fine. Forbes noted that Dikshit has a net worth of $1 billion and currently resides in Gibraltar. He developed the client software for Party Gaming, which owns and operates PartyPoker.
Also in the background of today’s developments is the seizing of over $30 million in online poker payment processor funds by the U.S. Attorney’s Office for the Southern District, which is the main office charged with handling financial crimes. No legal action has yet been filed in the case. Poker Players Alliance Chairman Alfonse D’Amato, appearing on Fox Business, explained, “It is not illegal for a person to play poker on the internet. What the [UIGEA] did was say that the payment processors, the financial community, could not distribute these funds.”
No indication was given as to what Kaplan’s future now holds.
