Following his arrest on Wednesday in the Dominican Republic, BetonSports (BoS) founder Gary Kaplan has been charged with 20 felony violations and will be sent to St. Louis, where former BoS CEO David Carruthers has lived under house arrest since last summer.
Kaplan's detention ends an eight-month worldwide search. He was rumored to be hiding in various locations (including Israel and Costa Rica) at various times and was ultimately picked up by Dominican authorities at a hotel in the Dominican Republic. He was immediately transported to Puerto Rico for a Thursday-morning appearance before U.S. Magistrate Judge Marcos E. Lopez.
Kaplan was one of 11 individuals indicted in July 2006 on 22 counts of racketeering, fraud, tax evasion and conspiracy in connection with taking illegal Internet bets from U.S. citizens. The indictment stemmed from a grand jury investigation out of the Eastern District of Missouri.
Catherine Hanaway, U.S. Attorney for the Eastern District of Missouri, said Kaplan has been personally charged with 20 felony violations of federal laws, including the Wire Act, Racketeer Influenced and Corrupt Organizations (RICO) conspiracy, interstate transportation of gambling paraphernalia, interference with the administration of Internal Revenue laws and tax evasion.
According to the indictment, Kaplan's clash with authorities began in 1993 when he was busted by New York state authorities for running an illegal sports betting operation in the state. He allegedly moved to Florida, where he continued his bookmaking operation and then to Aruba and Antigua before settling in San Jose, Costa Rica, where BoS got its start.
Authorities have asked that Kaplan be moved to St. Louis immediately--or be held without bond pending a hearing to move him to St. Louis--to answer the charges against him.
Jan Diltz, a spokeswoman for the DOJ, said that an identity and detention hearing has been set for Wednesday at 3:00 p.m., although she did not have any information on when Kaplan would be transferred to St. Louis or whether he would face trial separately or with the other defendants.
Kaplan's arrest could delay the trials of other the other defendants, including Carruthers, who was arrested while changing planes in the Dallas Ft. Worth airport in July and subsequently moved to St. Louis.
Hanaway gave credit for Kaplan's capture to the International Criminal Police Commission (Interpol), which on Jan. 15 joined the search for Kaplan by posting his photograph--along with that of Norman Steinberg, co-founder of the sports book--on the Interpol Web site. Steinberg is still at-large.
"This case helps to establish the effectiveness of the Interpol System of executing international arrest warrants. Officials at Interpol as well as officials with the Dominican Republic are to be commended for their cooperation with U.S. authorities," Hanaway said. "This was a worldwide search, and thanks to the assistance of many law enforcement agencies this fugitive will soon be back in St. Louis to face the charges against him."
The BoS indictment and subsequent events sent the online gambling industry into a tailspin.
In August, BoS closed down its U.S.-facing operations, which brought in around 95 percent of its profits, and this proved to be just drop in the bucket compared to what followed.
Congressional enemies of online gambling finally got their wishes in September with the passing of the Unlawful Internet Gambling Enforcement Act, which was signed into law in October. Numerous publicly traded online gaming companies shortly thereafter pulled out of the U.S. market and have consequently suffered major losses in revenues and market value.
The industry continues to feel the effects of the U.S. prohibition.