Ten guilty pleas
The US Attorney’s Office for the Northern District of Alabama (USAO-NDA) has announced ten men, including five from Alabama, have pleaded guilty to running a sports-betting ring that accepted an estimated $2bn+ in wagers.
conspiring to operate an illegal gambling business”
A USAO-NDA Wednesday press release stated the ten confessed before US District Judge Madeline Haikala “to conspiring to operate an illegal gambling business” and to being part of a money laundering conspiracy.
According to the DOJ, Birmingham, Alabama resident Timothy Pughsley, 53, established the illegal bookmaking organization known as “Red44” at least 17 years ago.
Pughsley and his guilty confederates operated the unlawful business via offshore server in Costa Rica.
Big fines to pay
Pughsley and the nine other defendants were all senior agents in the Red44 operation, according to the DOJ release. The Alabaman contingent includes the Red44 founder along with Nathan Burdette, Christopher Burdette, Thomas Zito, and Jonathan Lind, who only pleaded guilty to conspiring to run Red44.
Under the terms of the plea agreements, the defendants agreed to pay excise tax restitution to the Internal Revenue Service totaling nearly $20m. The financial penalty is for illegally accepting wagers from US-wide sports bettors and to “satisfy any income tax obligations that remain outstanding.”
not “victimless crimes.”
Special Agent in Charge of IRS Criminal Investigation Atlanta Field Office, Demetrius Hardeman, stated that illegal sports betting and dodging excise taxes were not “victimless crimes.”
Hardeman elaborated that the cash generated by unlawful gambling businesses is “often used to finance other criminal activities.” The Special Agent warned IRS-CI investigators are skilled at “following the money” and will bring other illegal operators to justice.
Lavish lifestyles
US Attorney Prim F. Escalona stated the guilty pleas came about after “years of hard work by members of federal and state law enforcement agencies.”
She added that the guilty parties unlawfully pocketed millions of dollars in bets “and lived lavishly while avoiding their excise tax obligations.” Escalona stated her office would hunt down “those who enrich themselves in violation of the law.”
Sentencing hearings for the ten men is set for May.