FORT WORTH, Texas – Federal officials have charged 11 people, including the CEO of a big gambling Web site, alleging they committed conspiracy, racketeering and fraud in taking sports bets from U.S. residents.
The Justice Department said Monday it is seeking the forfeiture of $4.5 billion, cars and computers from the defendants, including BetOnSports PLC and three other companies.
BetOnSports Chief Executive David Carruthers and four other defendants were arrested over the weekend. Carruthers was arrested Sunday at Dallas-Fort Worth International Airport during as he awaited a flight from Texas to Costa Rica, where the company has operations.
The 22-count indictment was unsealed Monday in St. Louis, where a federal judge also ordered BetOnSports to stop accepting bets placed from within the United States.
Several of the defendants live outside the United States, which will make them hard to catch, said U.S. Attorney Catherine Hanaway in St. Louis.
"This is a tough crime to prosecute," she said.
Among those who live abroad is Gary Stephen Kaplan, the founder of BetOnSports, which is incorporated in the United Kingdom and listed on the London Stock Exchange.
Trading of the company's shares was suspended in London on Tuesday. Shares of BetOnSports fell as much as 24 percent Monday following news of Carruthers' arrest, but they recovered to close 17 percent lower at 122.50 pence ($2.24).
In the fiscal year ending Feb. 5, BetOnSports reported a 65 percent gain in operating profit on continuing operations to $20.1 million. The company said it handled $1.77 billion worth of bets for the year, up 25 percent.
Kaplan is a former New York area bookie who moved his operations to the Caribbean after being arrested on gambling charges in New York in 1993.
Despite the move, the United States has remained Kaplan's main market, officials said. He is now living in Costa Rica and owns 15 percent of the company, according to the indictment. A warrant was issued for his arrest.
Officials said those arrested include Kaplan's brother, Neil Scott Kaplan, who handled purchasing for the company. He was arrested in Fort Pierce, Fla. Two other defendants were arrested in Miami and another was arrested in Philadelphia.
Carruthers was being held in Fort Worth after he was detained while trying to make a connecting flight Sunday from the United Kingdom to Costa Rica. A federal magistrate ordered him held until a detention hearing on Friday.
Carruthers' first appearance in court Monday lasted about 10 minutes. He was led into the courtroom in handcuffs, wearing a lime green T-shirt with the words "World Traveler" across the front, faded jeans and gray suede shoes.
Tim Evans, an attorney who appeared on Carruthers' behalf, handed him a lengthy document, adding, "You won't have time to read it all, of course."
Kevin Smith, a spokesman for BetOnSports, said Carruthers and other company officials had no idea that there was an indictment.
"Certainly had they told us, we would have been more than willing to negotiate with them and work on whatever these charges are," Smith said. "There wouldn't have been any need to nab him while he's waiting on a layover for a flight."
Others named in the indictment include Kaplan's sister and several BetOnSports employees. The other three companies named in the indictment are based in Florida and handle promotional activity for BetOnSports.
The indictment charges Kaplan with failing to pay federal wagering excise taxes on more than $3.3 billion in U.S. wagers.
Authorities also charged that Kaplan's group fraudulently claimed that Internet and phone wagering on sporting events was legal and licensed.
Internet gambling has become a political issue in Washington.
Last week, the House passed a bill that would make it illegal for American banks and credit card issuers to make payments to online gambling sites. The bill's fate in the Senate is uncertain, in part because of exemptions granted for horse racing and state lotteries.