In a sharp escalation of their crackdown on Internet gambling, United States prosecutors said yesterday that they were pressing charges against the chief executive of BetOnSports, a prominent Internet gambling company that is publicly traded in Britain, and against several other current and former company officers.

Federal authorities arrested the chief executive, David Carruthers, late Sunday as he was on layover at Dallas-Fort Worth International Airport on his way from Britain to Costa Rica. In a hearing yesterday in Federal District Court in Fort Worth, he was charged with racketeering conspiracy for participating in an illegal gambling enterprise.

Also at the hearing, the court granted the government’s request for a temporary restraining order preventing BetOnSports from accepting wagers from customers in the United States and requiring it to return money held in the accounts of American customers.

In addition to Mr. Carruthers, the government filed charges against 10 other people involved with BetOnSports and with three Florida marketing companies that prosecutors say were involved in promoting illegal gambling.

The charges, particularly those against Mr. Carruthers, who runs a company that has been a symbol of the investment potential of offshore casinos, raise complex legal and political questions. And they are the most direct attack in several years on offshore Internet casinos, setting up a showdown with an industry that has grown increasingly brazen in promoting online wagering in the United States.

The gambling sites allow people to place bets on sporting events and play casino games like blackjack from their computers. The companies keep their computer servers in places like the Isle of Man, Antigua and Costa Rica, where BetOnSports has its operating headquarters. […]

Prosecutors assert that under the Federal Wire Act of 1961, the providers and promoters of Internet sports books and casinos are participants in a criminal enterprise.

The fact that these operations are legal in their home jurisdictions “does not entitle them to do business in the United States,” said Catherine L. Hanaway, the United States attorney for the Eastern District of Missouri, which brought the indictment. The charges announced yesterday indicate that “their efforts to avoid U.S. law enforcement will be challenged and brought to justice whenever possible.”

In addition to Mr. Carruthers, prosecutors brought charges against Peter Wilson, BetOnSports’s media director; Gary Kaplan, the company’s founder; and several of Mr. Kaplan’s relatives, whom the indictment alleges were involved in the business. The indictment was returned June 1 but was sealed until yesterday. […]

The indictment seeks to have the accused forfeit $4.5 billion in holdings. […]

Ms. Hanaway, the United States attorney in Missouri, said the arrest happened during this visit because “it’s when we knew he was coming.” Asked whether it presented a challenge to prosecutors that Mr. Carruthers is not an American citizen, Ms. Hanaway said, “Thus far, no.” […]

Sue Schneider, publisher of Interactive Gaming News, an online magazine focusing on the Internet casino industry, said the charges would have at least one major chilling effect on the industry’s officers. “I imagine the number of executives coming through the U.S. on connecting flights will come to a screeching halt,” she said. […]

New York Times

My emphasis.

Firstly and OT, they probably knew he was passing through the US because the airlines are giving people’s itinearys to the feds on a regular basis.

Secondly, this is all wrong. BetOnSports is a 100% legal operation. It is not incorporated in the US, does not have any servers in the US and is in no way a US legal entity. Its owner is not a US person. It is however, on the internet, and las time I checked, the US does not own the internet, so why they think they can arrest the owner of this business is arrogance beyond comprehension.

If someone in Spokane wants to connect to BetOnSports with their browser, that is THEIR business, and it is not correct that the US government should arrest people from other countries who are going about their lawful business. If they want to stop internet gambling, then they should do what China does and block sites. Then of course, they would face a Supreme Court challenge, and they dont want that, so they take the easy route of arresting an innocent person. Shameful behaviour.

If the tables were turned, all americans would be OUTRAGED if one of their citizens was arressted while ‘on layover’ through Germany because he published texts in the USA that are illegal in Germany.

This situation is no different. Jurisdiction is a real and necessary thing, so that people in different places with different moral standards can live in peace. america is violating this rule by arresting people who are not breaking the laws in their own countries. All business men, if they have any brains at all are avoiding the US like a plague.

We can add this example to the one of the NatWest Three who have just been extradited without any basis at all, for crimes committed in the UK that have nothing to do with the US.

UPDATE

Read the PDF of the actual indictment, which says that they took over ONE BILLION dollars in bets, and that they BetOnSports must forfeit 4.5 BILLION dollars!

Now, what on EARTH was Carruthers doing on a commercial airline flight if they have as much money as this indictment alleges? Anyone with that much turnover flies private aviation by default.

I smell some inflated figures!

This entry was posted on Tuesday, July 18th, 2006 at 2:31 pm and is filed under Insanity, Money, The Law.