Carruthers Out Of Jail

Published: Thursday, August 17, 2006 Online-Casinos.com

CARRUTHERS OUT OF JAIL

After a month in custody, the ex-BetonSports CEO is freed with tough bail conditions

Former online gambling executive David Carruthers was freed on a $1 million bond Wednesday after spending nearly a month behind bars following his arrest on racketeering and fraud charges, Associated Press reports today.

Carruthers (48) was freed after a hearing before U.S. District Judge Mary Ann Medler. He had been expected to be released as early as Monday but it took days to work out technical details. Among those details: A dedicated phone line had to be installed at the residence where he will stay.

The charges against Carruthers are part of a 22-count indictment against London-based BetOnSports PLC being prosecuted by U.S. Attorney Catherine Hanaway in St. Louis. Carruthers was chief executive of the company until shortly after his arrest, when he was fired.

The case is one of the largest U.S. prosecutions of an online gambling company and has caused BetOnSports to close all of its U.S.-focused operations.

Early Wednesday morning, Carruthers entered Medler's courtroom in leg irons and handcuffs, escorted by a security guard. Carruthers sat alone at a table and declined to speak to the press. He will live under house arrest in the St. Louis area until his trial, the first hearing of which is scheduled for Aug. 21.

According to the terms of his bond, Carruthers will live in an upscale hotel in the suburb of Clayton. He will not be allowed to leave the hotel except for court appearances, meetings with his attorney or medical emergencies. Carruthers will wear an ankle bracelet to monitor his whereabouts.

During the hearing, Carruthers asked the judge only one question: "The house incarceration: Is that 24 hours a day?"

Medler told him it was. Federal officials overseeing Carruthers' bond wouldn't say whether he will be forced to stay in his room, or have access to the entire hotel. Carruthers' attorney Scott Rosenblum said his client is not a flight risk.

"He's looking forward to responding to these charges in court," Rosenblum said.

Federal prosecutors insisted that none of Carruthers' bond money come from the treasury of BetOnSports, Rosenblum said. He wouldn't say how Carruthers came up with the full payment, but said all the money was raised through legal means.

Hanaway said she will continue to prosecute the case against BetOnSports regardless of the company's decision to close its offices and stop accepting U.S.-based bets. She said the move does not absolve the company from taking illegal bets in the past.

Carruthers' next hearing is scheduled for Monday.

Federal prosecutors crafted a strict bond agreement because Carruthers is considered an extreme flight risk, said Nelson Rose, a professor at Whittier College of Law and an expert on Internet gambling.

Nelson said the federal case against Carruthers is strong. His indictment is based on a 1960s-era federal law known as the Wire Act that specifically bars making sports bets over the phone, even for international companies. BetOnSports is based in Costa Rica, but took the vast majority of its bets from the United States, according to the federal indictment.