The following examples of Gaming Investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted.
Owner of Illegal Online Gambling Website Sentenced
On July 28, 2015, in Newark, New Jersey, Joseph Graziano, of Springfield, was sentenced to 18 months in prison, three years of supervised release and ordered to forfeit $1 million and pay a $16,000 fine. Graziano previously pleaded guilty to racketeering conspiracy. Graziano was the principal owner of Beteagle.com, a website located in Costa Rica used to facilitate illegal online sports betting. Dominick J. Barone, of Springfield, worked with Graziano in carrying out the daily activities of the website and both men conspired with the Genovese Crime Family of La Cosa Nostra in the operation of Beteagle. As part of the conspiracy, associates of the Genovese family crew were given access to Beteagle and were considered “agents.” The agents had the ability to track the “sub-agents” under them and the wagers placed by their bettors. Associates of the crew paid out winnings or collected losses in person. If a bettor failed to pay his gambling losses, the crew used their La Cosa Nostra status and threats of violence to collect on these debts. On June 16, 2015, Barone was sentenced to 18 months in prison for his role in the scheme.
Eight Sentenced for Running Illegal Gambling Operation
On June 25, 2015, in Cincinnati, Ohio, Reece Powers II was sentenced to 30 months in prison and three years of supervised release. On March 31, 2015 Powers pleaded guilty to multiple federal offenses, including conspiracy to operate an illegal gambling business, operating an illegal gambling business, conspiracy to defraud the IRS and witness tampering. Powers was the former co-owner of R&J Partnership Ltd., doing business as Reece’s Las Vegas Supply (RLVS), a gambling supplies store located in Dayton, Ohio. Between February 2004 and May 2011, Powers oversaw the recruitment of local non-profit charitable organizations to sponsor poker fund raisers. Powers entered into arrangements with the charitable organizations to control all of the funds generated from the poker fund raisers. Powers, with the help of his co-conspirators, took a portion of the money generated to pay the events’ workers and other things. Powers provided false accounting to the charitable organizations regarding the funds received from the events, he skimmed money and supervised, or personally distributed, illegal cash payments to his co-conspirators and employees. In 2009, Powers and Allen G. Beck, a former business broker, conspired to defraud the IRS in attempting to sell RLVS. Powers and Beck arranged the sale to make it appear as if the business, and its associated real estate, was sold for less than its actual sale price. The other defendants charged in this and related cases, including Douglas A. Sanders, Jason S. Pulaski, Michael E. Gedeon, Jenifer Williams, Walter F. Dyer, Virgil D. Rockwell and Allen G. Beck. All were sentenced to terms ranging from probation to 12 months in prison.
Connecticut Man Sentenced on Gambling Charges
On March 25, 2015, in Rochester, New York, Mark Ruff, of Connecticut, was sentenced to 108 months in prison, three years of supervised release and ordered to forfeit $230,000. Ruff was previously convicted of conducting an illegal gambling business and conspiracy to commit money laundering. According to court documents, Ruff conducted an illegal gambling business with his brother Joseph Ruff and another individual, both of Rochester. The gambling operation involved sports betting through multiple offshore internet gambling websites. Ruff also conspired with his brother and others to launder $230,000 in illegal gambling proceeds. Ruff transferred the gambling proceeds from Rochester to an associate in Connecticut to conceal their source by depositing proceeds into a credit line and making subsequent cash withdrawals and writing checks from the credit line for himself and his brother. Those checks included $40,000 to a local country club for Joseph Ruff which the federal government seized on Aug. 11, 2014. Joseph Ruff was convicted and is awaiting sentencing.
Leader of Sports Betting Ring Sentenced on Racketeering and Related Charges
On Feb. 17, 2015, in Philadelphia, Pennsylvania, Joseph Vito Mastronardo Jr., of Meadowbrook, was sentenced to 20 months in prison, three years of supervised release and ordered to forfeit approximately $3.7 million. Mastronardo pleaded guilty on Jan. 31, 2014, to conspiring to participate in a racketeering enterprise (RICO), conducting an illegal gambling business, conducting four conspiracies to launder money, interstate travel in aid of racketeering, transmitting wagering information and aggravated structuring of cash deposits. Mastronardo Jr. was the leader of the Mastronardo Bookmaking Organization, a multi-million dollar sports betting operation with bettors throughout the United States. At its peak, the Mastronardo Bookmaking Organization had more than 1,000 bettors and was generating millions of dollars a year. Between Jan. 1, 2005 and Jan. 1, 2011, the organization used Internet websites and telephone numbers that allowed bettors to place sports bets on football, baseball, basketball, golf, horse racing and other sporting events. Residents of Costa Rica staffed the Internet websites and answered the telephones. In 2006 and 2010, law enforcement seized more than $2.1 million that Mastronardo hid in and around his home, including in specially-built secret compartments and in PVC pipes that were buried in his backyard. The Mastronardo Bookmaking Organization laundered the gambling proceeds by using a check cashing agency, two private bank accounts and numerous international bank accounts. On occasion, Mastronardo Jr., also provided instructions so that a losing bettor could pay a gambling debt through a charitable donation.
Colorado Man Sentenced for Running an Illegal Gambling Business
On Jan. 5, 2015, in Denver, Colorado, Kerwin Dale Sande was sentenced to 15 months in prison and three years of supervised release. In addition, Sande agreed to the forfeiture of $2 million in cash and assets for conspiring to own and operate an illegal gambling business and money laundering. Starting in the summer of 2006 and continuing through October 2013, Sande operated a gambling business out of his home. His business focused primarily on sports bookmaking, which included wagers on a variety of sporting events to include major league baseball games and golf, as well as professional and collegiate football, basketball and hockey. Sande recruited, entertained and interacted with bettors at exclusive golf and country clubs. He assigned a given bettor a credit limit within which the bettor was authorized to place bets and accepted bets through various means including on the telephone, through at least five or more "bet-takers", and over the internet using an off-shore internet betting website which he controlled. The website was housed and maintained through computer servers registered in Costa Rica. Sande collected gambler's debts in a variety of ways including taking cash payments directly from bettors at golf clubs, private parties or other public locations. He also accepted checks from bettors that would commonly be made out to his company, KDS Enterprises., Inc., as well as collecting wire transfers. Sande paid bettors their winnings in cash, but occasionally he would write checks and he would sometimes send cash payments directly to bettors using federal express where he would conceal the cash in the sealed pages of a magazine. Sande drove and owned several high-end sports and luxury cars, a number of which contained built-in, hidden lock boxes which he utilized to transport and transfer large sums of bulk currency for his unlawful gambling operation.
Three Sentenced in Illegal Gambling Operation in Guam
On Oct. 8, 2014, in Hagatna, Guam, three individuals were sentenced in a criminal conspiracy to conduct an illegal gambling business at the former MGM Spa in Tamuning. Jimmy Hsieh was sentenced to 24 months in prison and ordered to pay a $423,640 money judgment. In addition, Hsieh agreed to forfeit $178,113 from personal accounts and that three of his condos are subject to possible forfeiture proceedings. Hsieh pleaded guilty to gambling conspiracy and money laundering. William Perez, the manager and supervisor of the MGM poker operation in 2010, was sentenced to six months in prison, six months home confinement and three years of supervised release for conspiring to operate the illegal gambling business. Pauline Perez was sentenced to one year of probation and community service. According to court documents, from at least January 2006 until December 2010, the defendants conspired to offer card games of chance, including baccarat and poker, at the MGM Spa building. The defendants took a percentage of the winnings from each game. They knowingly conducted financial transactions involving the proceeds from the illegal gambling operation.
Hawaii Man Sentenced for Operating Illegal Gambling Business
On Oct. 3, 2014, in Honolulu, Hawaii, Bradley Ichiro Chiba was sentenced to six months in prison, three years of supervised release which includes six months of home confinement, and ordered to pay $11,096 in restitution to the IRS. Chiba pleaded guilty in June 2014 to filing a false tax return and operation of an illegal gambling business. According to court documents, beginning about August 2009 and continuing through about February 2014, Chiba operated an illegal gambling bookmaking business that was primarily involved in sports betting. Chiba ran the operation out of his residence on Kauai and had gross revenues of more than $2,000 in a single day. In addition, on or about April 11, 2013, Chiba filed an individual income tax return for the calendar year 2012 which falsely stated his adjusted gross income. Specifically, Chiba failed to report $39,779 in income he received as a bookmaker which resulted in a tax loss of $11,096.
Fiscal Year 2017 - Gaming Investigations