Youbet 'Resolves' Part in US Federal Probe

19 March 2008 has resolved its part in a federal investigation into illegal activity allegedly undertaken by customers of the company's former International Racing Group (IRG) subsidiary.

Under the terms of the agreement -- inked on Tuesday with the Nevada District of the U.S. Attorney's Office (USAO) -- Youbet is assured against future legal action from the government in return for its continued cooperation with officials.

In October, Youbet said federal authorities had seized $1.5 million in three IRG Nevada bank accounts and had conducted a search of its California headquarters. The company said this week that it would not contest the $1.5-million seizure and would reimburse customer funds "where it is legal and appropriate to do so."

Youbet interim Chief Executive Gary Sproule said the company was "pleased" with the terms of the agreement, and pledged its cooperation "in this very serious matter."

With regard to the probe -- which involves state authorities, the USAO, the Department of Homeland Security and U.S. Immigration and Customs Enforcement -- little is known.

A spokeswoman for the USAO told IGN in October and again today that she could neither confirm nor deny the investigation "unless someone has been charged."

Youbet, which maintains it was unaware of any illegal activity undertaken by its former IRG customers, could not be reached for comment.

In February the company shut down IRG, a CuraƧao-based offshore telephone wagering entity, because it had been "adversely impacted due to a severe reduction in wagering activity."

Youbet said it expects to incur ongoing costs associated with the investigation, but that the "precise amount or timing cannot be predicted at this time."

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