Fourteen men have been charged for operating an illegal bookmaking business following coordinated action by authorities across three US states.
More than a hundred agents and detectives from the FBI, San Diego Police Department and IRS Criminal Investigation arrested nine of the 14 defendants through coordinated actions in California, Nevada and Kentucky. Additional subjects remain at large in Canada and Thailand.
Three grand jury indictments unsealed Wednesday charged the men with participating in a sophisticated bookmaking ring that used the San Diego-based Lucky Lady Casino and Card Room in California as a legitimate front for the illicit operation.
The indictment alleges that the enterprise generated almost US$1m in illegal bookmaking proceeds.
The joint investigation began in 2014 and employed wiretaps and undercover agents to infiltrate the alleged racketeering enterprise.
The indictments allege that lead defendant Sanders Bruce Segal and others operated Segal’s Lucky Lady Sports Book, an illegal enterprise that connected bookies, sub-bookies and bettors with sports betting websites located outside the US, some of which were owned and controlled by members of the enterprise.
Bets were placed on the websites either through the bookies’ accounts or, for significant customers, through individual accounts that allowed bettors to directly wager for themselves. The enterprise also used “runners” to transport profits and proceeds.
“By grafting onto legitimate businesses, organized criminals and shady bookies have too long shielded themselves from law enforcement scrutiny and hidden huge illegal bookmaking profits,” said US Attorney for the Southern District of California Laura Duffy. “These indictments demonstrate the Department’s commitment to stemming the influence of racketeering activity in San Diego.”
FBI Special Agent in Charge, Eric Birnbaum, added: “This case is a classic example of how a legitimate business can be infiltrated and used to facilitate criminal activity by members of a criminal enterprise. The FBI is committed to disrupting and dismantling criminal enterprises that seek to use legitimate businesses as a platform for their criminal activity.”
The other defendants were named as Stanley Samuel Penn, Petter Magnus Karlsson, David Greg Leppo, Pablo Ballestero Frech, Sydney Bruce Segal, Joseph Edward Spatafore, Minh Triet Dinh Nguyen, James Hang Tear, Ken Pheng Keo, Jason D. Taylor and Jeffrey Alan Burke.
Two defendants were arraigned Wednesday before US Magistrate Judge Nita Stormes, with the remaining defendants who are in custody expected to be arraigned Thursday.
Six of the defendants have been charged with racketeering conspiracy to conduct enterprise affairs (RICO), which has a maximum penalty of 20 years in prison, while all 14 have been charged with running an illegal gambling business (maximum 5 years in prison).