Online Gambling Tycoon Looses to US Justice

Published Friday, August 14, 2009 -

BetOnSports founder Gary Kaplan has pleaded guilty to charges of federal racketeering and conspiracy. The investigation and prosecution took years to complete as this is a difficult case involving the complex world of offshore sports gambling.

Gary S. Kaplan, who is fifty years old is the founder of online gambling empire BetonSports. In his guilty plea he has agreed to forfeit $43.6 million USD that he made during his criminal activities. Kaplan has said he is guilty of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, the Wire Wager Act, and related felonies. If the plea agreement is permitted by the judge, Kaplan may receive 41 to 51 months in prison.

Kaplan was apprehended in the Dominican Republic back in March of 2007 after keep ahead of authorities for nine months. He has been in custody since then. Kaplan began with companies registered in Aruba, Antigua, and Costa Rica, as far back as the mid 1990's providing sports betting to US customers. Kaplan's BetonSports made in excess of $1bn USD in 2004, with almost 1 million registered customers, who placed 10 million bets. Also in 2004 the company made a successful public offering on the London Alternative Investment Market raising more than $100m.

The collapse of the company cost customers between $7m and $20m USD. CEO of BetonSports David Carruthers and the company also pleaded guilty to violations of anti-gambling statutes in 2007 but have yet to be sentenced.

Kaplan said, "I accept responsibility for my actions and I realize that as a US citizen, I should have abided by US law," adding, "Nevertheless, I do not agree with the US stance against offshore telephone and Internet sports betting, but I do accept full responsibility for my decisions."

The forfeited $43.65m has been wire transferred from a Swiss bank to a US District Court bank account. It is estimated that this amount is about half of Mr. Kaplan's net worth. Sentencing has been scheduled for October 27, 2009 in a St. Louis, Missouri, federal court.

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