Queens District Attorney Richard A. Brown, joined by New York City Police Department Commissioner Raymond W. Kelly, Acting Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation Mary E. Galligan, and representatives of other law enforcement agencies from across the country, today announced the indictment of 25 individuals – including three owners of a sports betting Internet website – in five states on charges of operating an illegal sports betting enterprise in Queens County and elsewhere that profited by more than $50 million during an eighteen-month period by accepting wagers on various sporting events – including horse-racing and professional and college football, basketball, hockey and baseball.
In addition, dozens of search warrants and asset seizure warrants were executed in multiple jurisdictions in New York, New Jersey, Pennsylvania, Nevada and California, resulting, to date, in the seizure of real property and more than $7.6 million in cash and gambling chips. The arrests and/or warrants were carried out by the New York City Police Department’s Organized Crime Investigation Division, the FBI’s Asset Forfeiture Section, the Nevada Gaming Control Board, the New Jersey State Commission of Investigation, the Monmouth County (NJ) Prosecutor’s Office, the New Jersey State Attorney General’s Office, the Pennsylvania State Police and the Los Angeles Police Department. Furthermore, the Office of Loretta E. Lynch, the United States Attorney for the Eastern District of New York, has filed asset forfeiture warrants against the defendants’ assets.
Eight defendants were arrested yesterday and arraigned in Queens County Supreme Court in Kew Gardens. Seventeen additional defendants were arrested yesterday in New Jersey, Pennsylvania, Nevada and California. The defendants are all charged with Enterprise Corruption – a violation of New York State’s Organized Crime Control Act – as well as being variously charged with promoting gambling, money laundering and conspiracy. They each face up to 25 years in prison if convicted.
District Attorney Brown said, “The defendants are accused of operating an incredibly (MORE)
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lucrative illegal gambling operation – taking in more than $50 million in a year and a half. Such unlawfully earned profits are often – and easily – diverted to more insidious criminal enterprises. ”
The District Attorney continued, “Illegal gambling is not a victimless crime. Those who participate in these criminal enterprises often use threats, intimidation and even physical force to collect debts and oftentimes charge usurious interest rates on outstanding debts. In addition to our NYPD and FBI partners, I want to thank our other law enforcement and governmental colleagues and authorities in other states for their cooperation and efforts in this investigation. So massive was the enterprise that only with their assistance could we bring these defendants to justice.”
Police Commissioner Kelly said, “The defendants in this case gambled and lost that their illegal activities would fly under the radar. I want to commend the NYPD detectives, federal agents and our out-of-state partners, who together with the Queens District Attorney’s prosecutors, brought these individuals to justice.”
Acting FBI Assistant Director in Charge Galligan said, “This action is an important step in policing illegal sports wagering, from hockey to horse racing. This is yet another example of the collaboration between the FBI and our partners that is increasingly necessary to combat evermore sophisticated crimes and the criminals who commit them.”
District Attorney Brown said that the investigation leading to today’s indictment began in February 2011 when NYPD Organized Crime Investigation Division detectives developed information about an illegal sports betting operation and began a joint investigation with the District Attorney’s Organized Crime and Rackets Bureau. The investigation included physical surveillance, intelligence information and court-authorized electronic eavesdropping.
According to the indictment, between April 13, 2011 and October 18, 2012, the defendants conspired to acquire money illegally through the operation of an unlawful gambling enterprise involving the use of Internet web sites that accepted bets on sporting events.
The indictment also alleges that the ring used non-traditional “wire rooms” in the form of off- shore, Internet-based gambling services – such as www.pinnaclesports.com, www.jazzsports.net/com, www.wager4you.com and www.playhera.ag – used by bettors and agents to actually place their wagers. It is alleged that the members of the enterprise used the off-shore wire rooms to maintain the gambling accounts of numerous agents through the Internet website in an effort to evade law enforcement detection through traditional methods.
Law enforcement crackdowns on traditional mob-run wire rooms have led to the use by illegal gambling rings of off-shore gambling web sites where action is available around the clock. Bettors can click on an off-shore gambling website over the Internet and be assigned individual login codes and passwords. Their wagers and win-loss amounts are recorded in “sub-accounts” maintained in the accounts of “agents.” These gambling web sites typically store their information on computer servers outside the United States – such as in Costa Rica and Panama – and “bounce” their data through a series of server nodes in an effort to evade law enforcement.
The indictment charges that at least fifteen of the defendants were “bookmakers”– Daniel Monreal and Pinnacle Sports owners Stanley Tomchin and George Molsbarger, in California; Steven
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