While World Sports Exchange's Jay Cohen awaits his February 14 trial for allegedly violating the Federal Interstate Wire Act in the Southern District of New York in 1998, a second case has opened--and shut--in the Eastern District of Missouri. The proprietors of Paradise Casino, an Internet and telephone sportbook, pleaded guilty on January 26 in a St. Louis federal court to charges of violating the Wire Wager Act, money laundering and endeavoring to impair or obstruct the IRS Administration of the Internal Revenue Code. According to the prosecutor, Assistant U.S Attorney Mike Fagan, the case could be the first of many to be heard in St. Louis.
Marc Meghrouni, 39, of Balboa, Calif., and Scott D. Shaver, 40, of Garden Grove, Calif. operated the sports betting service via a Nevada company called Hoss Limited Inc. Authorities say the crime spanned several jurisdictions, including California, Missouri, Florida, Georgia, Nevada, the Cayman Islands, Ireland and elsewhere. According to a press release issued by U.S. Attorney Audry G. Fleissig, the Paradise Casino began excepting wagers from U.S. bettors in August 1995 out of Antigua, temporarily operated out of Atlanta, Georgia (thanks to a hurricane) and eventually set up shop in Curacao. Between '95 and '00 the company aggregated more than $300 million
Pursuant to their pleas, the partners collectively will forfeit a $2 million office building in Irvine, Calif. a 1995 Lamborghini Diablo worth nearly $250,000, a condo worth more than $1 million and $11.4 million in back taxes, interest and penalties. Sentencing is scheduled for June 9, at which time the men could receive up to five years in jail and fines up to $500,000 each. Hoss Limited could be smacked with a fine as hefty as $3.5 million.
The trial ended up in St. Louis because the company channeled funds through a Missouri bank. Fleissig says more prosecutions can be expected. Fagan intimated that additional trials may be heard in St. Louis because a high volume of wire transfers to U.S. bank accounts go through a Western Union processing center in Bridgeton, Missouri, a suburb of St. Louis. That, according to Fagan, establishes venue for prosecutors in the Eastern Missouri district.
The Paradise Casino investigation was conducted in conjunction with the IRS, U.S. Customs, Interpol and the Orange County Prosecutor's office.