Three residents of West Montgomery County, Texas, were arrested Tuesday on charges of money laundering in connection to Internet gambling. One United States legal expert believes the operation typifies illegal stateside bookies, which use online sports books as a low-cost strategy to mitigate the risks of imbalanced bets.
The Montgomery County Sherriff's Office Special Investigations Unit arrested Justin Franciscotty, 37, his wife, Ana Franciscotty, 30, and his sister-in-law, Stephanie Uselton, 25, at a home registered in Ms. Uselton's name.
According to The Courier, a local daily, all three arrestees were charged with second-degree felony money laundering, punishable by between two and 20 years in prison and fines of up to $10,000.
The three are accused of running an online gambling operation, which investigators said was based in Costa Rica.
"The domain name and setup was based in Costa Rica," Sgt. David Womack, of the special investigations unit, told The Courier. "It's like an offshore gambling operation, but you can't operate offshore from the U.S."
Sgt. Womack said the unit's investigation revealed large quantities of cash were arriving to the home via the United States Postal Service. Inside, packages postmarked from different areas of the United States were found and thought to have contained cash.
Leaving the residence, Mr. Franciscotty was stopped in his car and found carrying $6,000 -- cash -- in his pocket. An additional $10,000 in cash was found inside.
Also found inside were Rolex watches valued between $25,000 and $30,000, as well as diamond necklaces and earrings worth $20,000.
"It sounds to be like another example of how traditional illegal bookies are still doing illegal bookmaking, but tying it into the internet," I. Nelson Rose, a California lawyer who specializes in Internet gambling law, told Interactive Gaming News in an e-mail Wednesday.
"These are not large-scale retail operations, like the actual sports books in Costa Rica. Illegal bookies have relatively few customers, because they don't want to attract the attention of the police. They work almost exclusively with cash."
Three computers were taken as evidence, and multiple televisions with satellite feeds were discovered. Authorities believe the televisions were for watching sporting events as part of Mr. Franciscotty's alleged bookmaking operation.
"In the past, they (illegal bookies) hoped the best on both sides of a game would even out," Mr. Rose wrote. "If someone made a very large bet, the bookie had to lay off some of it with a bigger bookie, usually organized crime. Now, they can use an internet sports book, which allows the illegal bookie to avoid the risk of imbalanced bets at a small cost."
Sgt. Womack did not reveal to The Courier how the special investigations unit was tipped off.
He said federal authorities were involved in the investigation.
"This is a now-familiar pattern; a bookie thinks he can avoid DoJ (Justice Department) and bank scrutiny of overseas wire transfers, etc. by taking the bets offshore, but collecting and paying off at home," Martin D. Owens Jr., a California gaming attorney, told IGN in an e-mail Thursday. "Actually it gives him the worst of both worlds: Wire Act AND money laundering."