The indictment

[Uglyowl]

http://www.telegraph.co.uk/money/graphics/2006/07/18/ubeton17pdf.pdf

[Wynton]

Thanks for that link. I have skimmed through the indictment, and here are some initial thoughts (and because I skimmed, I reserve the right to change my views on reflection):

First, the indictment is clearly based upon the use of the internet as well as the telephone to accept gambling bets.

Second, the indictment identifies two types of illegal gambling. Betting on sports, and "casino type" betting. I believe blackjack is mentiond as an example, but poker does not appear anywhere in the indictment. I have no idea whether the sites involved actually take bets on poker.

Third, there are a few different allegations of fraud. One claim is that the sites fraudulently claimed in advertising that the sites were "legal and licensed." Another claim is that the sites suggested that entities known as "Offshore Gaming Association" and "International Sportsbook Council" were independent watchdog agencies, when they actually were controlled by the defendants and directed customers to their gambling sites.

Fourth, at VERY first glance, the money laundering claims seem really weak to me, while the tax evasion charges seem solid.

That is all for the moment.

[Uglyowl]

Is this saying that if a portion of the gambling entities profit is from U.S. customers then they owe our government taxes?

This is outside of whether or not the operation is legal or not.

Haven't had time to read it in depth.

[Knockwurst]

[ QUOTE ]
Thanks for that link. I have skimmed through the indictment, and here are some initial thoughts (and because I skimmed, I reserve the right to change my views on reflection):

First, the indictment is clearly based upon the use of the internet as well as the telephone to accept gambling bets.

Second, the indictment identifies two types of illegal gambling. Betting on sports, and "casino type" betting. I believe blackjack is mentiond as an example, but poker does not appear anywhere in the indictment. I have no idea whether the sites involved actually take bets on poker.

Third, there are a few different allegations of fraud. One claim is that the sites fraudulently claimed in advertising that the sites were "legal and licensed." Another claim is that the sites suggested that entities known as "Offshore Gaming Association" and "International Sportsbook Council" were independent watchdog agencies, when they actually were controlled by the defendants and directed customers to their gambling sites.

Fourth, at VERY first glance, the money laundering claims seem really weak to me, while the tax evasion charges seem solid.

That is all for the moment.

[/ QUOTE ]

I would add that the main fraud argument is that they claimed to be "legal and licensed." To base the allegations of fraud on such a flimsy reed is contemptible imo.

What does legal and licensed mean? I'm sure they are legal and licensed in Costa Rica or wherever they are based.

Did they say legal and licensed in the USA?

Is it fair to assume that is what they were implying?

Should this be the basis for taking down a 4.5 billion dollar enterprise?

I don't doubt that they can get a conviction in Missouri and have that conviction upheld through to the U.S. Supremes. But this is not justice. This is the billion dollar equivalent of throwing someone in jail for spitting on the sidewalk.

[Wynton]

Basically, the tax evasion claims allege that, during specified periods, the defendants did business in the US and made x amounts. But they neglected to pay, and tried to evade, "wagering excise taxes."

[SumZero]

It looks like from this too that part of the charges are that betonsports evolved out of an illegal, based in the US, sports book.

And that they are using RICO to hold David Carruthers (as well as the others) responsible for the illegal activity dating back to 1993 even though he was only involved in the betonsports part of it. But that their idea is that everyone is guilty and financially lible for the activities of everyone else in the group, even if some of the group remain outside of custody.

[Nate tha\\\' Great]

[ QUOTE ]
Thanks for that link. I have skimmed through the indictment, and here are some initial thoughts (and because I skimmed, I reserve the right to change my views on reflection):

First, the indictment is clearly based upon the use of the internet as well as the telephone to accept gambling bets.

Second, the indictment identifies two types of illegal gambling. Betting on sports, and "casino type" betting. I believe blackjack is mentiond as an example, but poker does not appear anywhere in the indictment. I have no idea whether the sites involved actually take bets on poker.

Third, there are a few different allegations of fraud. One claim is that the sites fraudulently claimed in advertising that the sites were "legal and licensed." Another claim is that the sites suggested that entities known as "Offshore Gaming Association" and "International Sportsbook Council" were independent watchdog agencies, when they actually were controlled by the defendants and directed customers to their gambling sites.

Fourth, at VERY first glance, the money laundering claims seem really weak to me, while the tax evasion charges seem solid.

That is all for the moment.

[/ QUOTE ]

So basically, this is the big honkin' test case to see just how illegal internet gambling is under our existing laws?

Perhaps this will quell the Senate's appetite to pass the Goodlatte bill this year. Perhaps we'll get a precedent emerging from this case that the current law really isn't very strong. Perhaps people will see the amount of money involved, and realize that we need to get into this racket for ourselves ...

But I'm flying to Vegas on Thursday, and I'm wondering about cancelling that return flight back.

[Wynton]

[ QUOTE ]

Did they say legal and licensed in the USA?


[/ QUOTE ]

For anyone who hasn't read the indictment, I'll elaborate:

The indictment says that the advertisements falsely stated that the internet and telephone gambling was "legal and licensed." That sentence does not refer to US regulations. Separately, the indictment states that the businesses, in fact, were "not legal or licened in the US."

I am sure the theory is that the advertising falsely implied, though did not explicitly assert, that the gambling was authorized by US laws.

[Knockwurst]

[ QUOTE ]
[ QUOTE ]

Did they say legal and licensed in the USA?


[/ QUOTE ]

For anyone who hasn't read the indictment, I'll elaborate:

The indictment says that the advertisements falsely stated that the internet and telephone gambling was "legal and licensed." That sentence does not refer to US regulations. Separately, the indictment states that the businesses, in fact, were "not legal or licened in the US."

I am sure the theory is that the advertising falsely implied, though did not explicitly assert, that the gambling was authorized by US laws.

[/ QUOTE ]

My point exactly, and to base this prosecution and the life of a 4.5 billion dollar enterprise on whether they implied that "legal and licensed" meant in the U.S., is a grave overreach in my opinion.

[Wynton]

[ QUOTE ]
Perhaps people will see the amount of money involved, and realize that we need to get into this racket for ourselves ...

[/ QUOTE ]

The indictment does ask for forfeiture of the measly amount of "at least $4.5 billion dollars." And it's kind of amusing that on top of that sum, they also ask for forfeiture of various recreational vehicles and laptops.

Can you imagine the defendants' reactions: oh no, take the money, but NOT the laptops!

[Nate tha\\\' Great]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]

Did they say legal and licensed in the USA?


[/ QUOTE ]

For anyone who hasn't read the indictment, I'll elaborate:

The indictment says that the advertisements falsely stated that the internet and telephone gambling was "legal and licensed." That sentence does not refer to US regulations. Separately, the indictment states that the businesses, in fact, were "not legal or licened in the US."

I am sure the theory is that the advertising falsely implied, though did not explicitly assert, that the gambling was authorized by US laws.

[/ QUOTE ]

My point exactly, and to base this prosecution and the life of a 4.5 billion dollar enterprise on whether they implied that "legal and licensed" meant in the U.S., is a grave overreach in my opinion.

[/ QUOTE ]

A great number of indictments and similar legal proceedings are going to take a "kitchen sink" approach at first. Certainly, some of the counts in the indictment are going to be much stronger than others.

[tipperdog]

Thanks for the link Ugly.

I've read the indictment, too. It's an extremely broad broadside at online gambling generally. My immediate takeaways:

1. At its core, the gov't is making a simple argument that attacks internet gambling at its core: If you run the gambling servers from another country, but in any way facilitate (like setting up a toll-free number) or entice (through advertising or direct mail) gambling from the U.S., you've broken a number of laws.

2. The above construction is a frontal assault on online gambling. That poker isn't mentioned is not relevant. If the DoJ's theory holds up here, operating a poker site is clearly illegal. Yes, you can make a lawyer's argument that poker isn't "gambling," but you're really in denial if you think that argument will prevail.

3. ANYONE who works (for money) for an offshore site is vulnerable. Mike Sexton? Lee Jones? Mike O'Malley? Doyle Brunson? I'm sure the DoJ is most interested in CEOs, but these guys (and many others) could face indictment on the Wire Act and RICO charges under the same theory.

4. Any online gambling CEO who sets foot in the U.S. is an idiot. I'm sure Dikshiit will have to decline my invitation to my Christmas Party.

In a nutshell, it's bad. Obviously, we'll see how it plays out. This could be a major test case on the Govt's fundamental theory.

[bluesbassman]

WTF... do we live in Soviet Russia?

This action is equivalent to, say, the North Korean or Chinese government grabbing the CEO of Yahoo or whatever for "illegally" making information available to their respective citizens on the internet. The U.S. Marshals who executed this "warrant" are Nazi scum and should be ashamed of themselves.

As far as I'm concerned, if the Brits sent the SAS to rescue Carruthers and kick some ass, they'd be justified and I'd cheer them on. (Not that it's worth it or the business of the military to rescue individual citizens from tyrannical governments.)

[CORed]

[ QUOTE ]

As far as I'm concerned, if the Brits sent the SAS to rescue Carruthers and kick some ass, they'd be justified and I'd cheer them on. (Not that it's worth it or the business of the military to rescue individual citizens from tyrannical governments.)

[/ QUOTE ]

Ain't gonna happen. But I wouldn't be bit surprised if Carruthers skips his bond. I'm sure his bond will be atronomical, but he'll probably be much better off forfeiting it than sticking around and trying to fight it in court. U.S/Canada border is wide open, and US/Mexico border isn't that hard to cross either, except he's have to fight the crowds going the other way.

[JPFisher55]

I read this indictment. It is interesting that every time that wagers over Internet are mentioned the phrase is over "telephone and Internet." If not settled, this case will try the issue of whether the two are the same. It is possible that a judge could throw out the allegations of accepting wagers over the Internet, but not over the telephone.
The tax evasion charges of evading the federal gambling excise tax could involve the same issue. Could not accepting a wager over the Internet be a wager in Costa Rico, not subject to the tax, but accepting one over the telephone be a wager in the US, subject to the tax.
I think that the DOJ plans on winning the wager over telephone charges. Even if it loses the wager over Internet charges (which we hope) the whole case will scare the rest of the online gambling industry.
I hope the whole case gets tried.

[Jay Cohen]

1084 refers to a "Wire Communication Facility." We did not waste our time in my case trying to argue that the internet at some point did not pass through a "Wire Communication Facility." It just doesn't pass the laugh test.

[LinusKS]

[ QUOTE ]
But I wouldn't be bit surprised if Carruthers skips his bond. I'm sure his bond will be atronomical, but he'll probably be much better off forfeiting it than sticking around and trying to fight it in court.

[/ QUOTE ]

They may not set a bond, for pretty much that exact reason.

If you run an internet gambling site, you'd be an idiot to step foot in the US. It wasn't exactly rocket science before, but it's plainly a boner now.

[locutus2002]

The indictment alleges activities that are true for all of the online poker sites.

I think this is a very bad sign for online poker, and I'd expect and prepare for the worst. Even if the govt decides not to prosecute the players (on Rico Statutes and tax evasion), it will substantially change the game of online poker, and send it underground. There is no reason for them to single out Bodog.

[Self Made]

A lot of you still don't seem to get a basic fact: the Wire Act only applies to sportsbetting. And the courts have agreed that it means what it says: just sports betting.

The current administration takes the postion that all online gambling violates the Wire Act, but the courts aren't likely to start agreeing with them now.

[Zele]

Which is why Congress is interested in updating the Wire Act. It's not like it is part of the Consitution; all it takes is another federal law to change its scope.

[locutus2002]

Given the overwhelming support for Republican backed HR 4411, it's only a matter of time before congress passes legislation that addresses online poker. Based on the House bill, the structure of the legislation will allow the DOJ to hold any party (Gambling house, ISP, CC, Online Bank, Player) responsible for breaking the law.

I doubt that you can make a case that congress will not extend the wire act to cover the Internet.

[Leavenfish]

[ QUOTE ]
Which is why Congress is interested in updating the Wire Act. It's not like it is part of the Consitution; all it takes is another federal law to change its scope.

[/ QUOTE ]

It's an election year and the right wing Republican base (for the most part)are growing a little tired of all the 'ten commandments (all Christian religious displays)in public places', patriotism in an unpopular war, tax and spend Liberals (HOW much has Bush spent??), etc. They need red meat.

---Leavenfish