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BetonSports ex-CEO pleads not guilty to all charges
The AP reportage out of St Louis was a little confusing at first on Monday this week. The initial report was that dismissed BetonSports CEO David Carruthers had not been arraigned with 7 others due to travel delays, but then later reports said that he had, in fact arrived in St. Louis, had been arraigned and pleaded not guilty.
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However, unlike the others named in the federal grand jury indictment he remained in custody in St. Louis until his legal representative could negotiate a bail agreement.
Later reports in The Guardian newspaper suggested that bail of US$ 1 million was likely to be agreed, along with conditions such as electronic tagging and remaining within the city precincts until the next court date, set by Judge Mary Ann Medler for 21 August.
The 48-year-old British businessman's associates say he is not doing well. One said: "He looks like a beaten man - not physically beaten but just beaten down." Wearing leg irons, a white T-shirt and loose beige slacks, Carruthers only spoke to confirm his name, age and plea.
Speaking outside the court, his lawyer, Tim Evans, said: "Right now, we want to get him out and living in clean sheets and clean clothes."
Carruthers was arrested while changing planes in Texas last month en route between Britain and BetonSports' operations in Costa Rica. The arrest was based on a federal grand jury 22-count indictment charging 11 individuals and four corporations on various charges of racketeering, conspiracy, illegal gambling and fraud.
Following his arrest, he was dismissed by the company, although insiders say this was a legal technicality adopted by BetonSports so that it could continue to insist that it had not received a contentious restraining order, which had been served on Carruthers, requiring it to repay cash to thousands of customers.
However, Judge Medler found that the company had been correctly served although it was not represented at the hearing, giving rise to a comment by US Attorney Catherine Hanaway that this did not surprise her: "They have not had any regard for the law. And to not appear would be a further step along that same path," she said.
The lawyer for one of the marketing companies named in the indictment commented to Associated Press reporters, "BetOnSports and others who did not come here, maybe they are thumbing their nose at the government. We do not think much of this case either."
Carruthers was one of several BetOnSports employees and associates named in a federal 22-count indictment who entered not guilty pleas (see earlier InfoPowa reports) Neil Kaplan and Lori Kaplan Multz, the brother and sister of BetOnSports founder Gary Kaplan, were among them. Kaplan is a former New York bookie now living in Costa Rica who founded BetonSports, authorities said. He remains at large despite the indictment.
Also entering not guilty pleas at Monday's arraignments were BetOnSports employee Tim Brown; William Lenis, 52, who owned Mobile Promotions Inc., a Florida company that did promotions and marketing for BetOnSports; William Lenis' son and daughter, Monica and William Luis Lenis, and his nephew, Manny Lenis, who worked for Mobile Promotions. William Lenis also owned two other companies named in the indictments.
The government claims BetOnSports and its employees fraudulently took billions of dollars in wagers from U.S. residents by phone and over the Internet without paying excise taxes. The Justice Department is seeking the forfeiture of $4.5 billion, cars and computers from the defendants.
In a separate courtroom Monday, U.S. District Judge Carol Jackson extended a temporary restraining order on BetonSports until Aug. 14 to halt all BetOnSports business in the United States.
BetonSports is a UK publicly traded holding company that owns a number of Internet sportsbooks and casinos. The company is being targeted by Missouri's district attorney, Catherine Hanaway, a conservative who headed the Missouri arm of George Bush's campaign for the White House and who was subsequently appointed by presidential decree.
The fugitive founder of BETonSPORTS.com, Gary Stephen Kaplan, 47, was 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 a release.
Court documents have disclosed details of the "sting" used to catch BetonSports which initially focused on a promotional van used by the company.
In October 2002, the BetonSports van was spotted in a car park outside the St Louis Rams American football stadium. When undercover officers visited, they were encouraged to open a betting account. To get round the illegality of off-shore betting, they were told to pay through a Western Union money transfer to a third party in either Belize or Ecuador who would place the bet on their behalf.
An affidavit filed in court says specialists traced similar Western Union transfers back to 18 gamblers who sent $2.5 million over a three-year period, including $40 000 sent by two Missouri residents.
Other evidence includes BetonSports radio commercials in which the company described itself as "legal and licensed" - which was misleading, according to the authorities, because it was not licensed in the US.
The US government has seized marketing materials sent to an address in a St Louis suburb which, prosecutors say, constitutes solicitation for illegal betting.
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