Online Casino Exec Remains In Custody

Published: Tuesday, August 01, 2006 Online-Casinos.com

ONLINE CASINO EXEC REMAINS IN CUSTODY (update)

BetonSports ex-CEO pleads not guilty to all charges

The AP reportage out of St Louis was a little confusing yesterday (Monday)
The initial report was that dismissed BetonSports CEO David Carruthers had
not been arraigned with 7 others due to travel delays, but then later
reports said that he had, in fact arrived in St. Louis, had been arraigned
and pleaded not guilty.

However, unlike the others named in the federal grand jury indictment he
remained in custody in St. Louis until his legal representative could
negotiate a bail agreement.

Later reports in The Guardian newspaper suggested that bail of US$ 1
million was likely to be agreed, along with conditions such as electronic
tagging and remaining within the city precincts until the next court date,
set by Judge Mary Ann Medler for 21 August.

The 48-year-old British businessman's associates say he is not doing well.
One said: "He looks like a beaten man - not physically beaten but just
beaten down." Wearing leg irons, a white T-shirt and loose beige slacks,
Carruthers only spoke to confirm his name, age and plea.

Speaking outside the court, his lawyer, Tim Evans, said: "Right now, we
want to get him out and living in clean sheets and clean clothes."

Carruthers was arrested while changing planes in Texas last month en route
between Britain and BetonSports' operations in Costa Rica. The arrest was
based on a federal grand jury 22-count indictment charging 11 individuals
and four corporations on various charges of racketeering, conspiracy,
illegal gambling and fraud.

Following his arrest, he was dismissed by the company, although insiders
say this was a legal technicality adopted by BetonSports so that it could
continue to insist that it had not received a contentious restraining
order, which had been served on Carruthers, requiring it to repay cash to
thousands of customers.

However, Judge Medler found that the company had been correctly served
although it was not represented at the hearing, giving rise to a comment by
US Attorney Catherine Hanaway that this did not surprise her: "They have
not had any regard for the law. And to not appear would be a further step
along that same path," she said.

The lawyer for one of the marketing companies named in the indictment
commented to Associated Press reporters, "BetOnSports and others who did
not come here, maybe they are thumbing their nose at the government. We do
not think much of this case either."

Carruthers was one of several BetOnSports employees and associates named in
a federal 22-count indictment who entered not guilty pleas (see earlier
Online-Casinos.com and InfoPowa reports) Neil Kaplan and Lori Kaplan Multz, the brother and sister
of BetOnSports founder Gary Kaplan, were among them. Kaplan is a former New
York bookie now living in Costa Rica who founded BetonSports, authorities
said. He remains at large despite the indictment.

Also entering not guilty pleas at Monday's arraignments were BetOnSports
employee Tim Brown; William Lenis, 52, who owned Mobile Promotions Inc., a
Florida company that did promotions and marketing for BetOnSports; William
Lenis' son and daughter, Monica and William Luis Lenis, and his nephew,
Manny Lenis, who worked for Mobile Promotions. William Lenis also owned two
other companies named in the indictments.

The government claims BetOnSports and its employees fraudulently took
billions of dollars in wagers from U.S. residents by phone and over the
Internet without paying excise taxes. The Justice Department is seeking the
forfeiture of $4.5 billion, cars and computers from the defendants.

In a separate courtroom Monday, U.S. District Judge Carol Jackson extended
a temporary restraining order on BetonSports until Aug. 14 to halt all
BetOnSports business in the United States.

BetonSports is a UK publicly traded holding company that owns a number of
Internet sportsbooks and casinos. The company is being targeted by
Missouri's district attorney, Catherine Hanaway, a conservative who headed
the Missouri arm of George Bush's campaign for the White House and who was
subsequently appointed by presidential decree.

The fugitive founder of BETonSPORTS.com, Gary Stephen Kaplan, 47, was
charged with 20 felony violations of federal laws including: the Wire Act,
Racketeer Influenced and Corrupt Organizations (RICO) Conspiracy,
interstate transportation of gambling paraphernalia, interference with the
administration of Internal Revenue laws and tax evasion, according to a
release.

Court documents have disclosed details of the "sting" used to catch
BetonSports which initially focused on a promotional van used by the
company.

In October 2002, the BetonSports van was spotted in a car park outside the
St Louis Rams American football stadium. When undercover officers visited,
they were encouraged to open a betting account. To get round the illegality
of off-shore betting, they were told to pay through a Western Union money
transfer to a third party in either Belize or Ecuador who would place the
bet on their behalf.

An affidavit filed in court says specialists traced similar Western Union
transfers back to 18 gamblers who sent $2.5 million over a three-year
period, including $40 000 sent by two Missouri residents.

Other evidence includes BetonSports radio commercials in which the company
described itself as "legal and licensed" - which was misleading, according
to the authorities, because it was not licensed in the US.

The US government has seized marketing materials sent to an address in a St
Louis suburb which, prosecutors say, constitutes solicitation for illegal
betting.