Former CEO of BetOnSports.com Sentenced to
Prison Term
By Grant Gross, IDG News Service
The former director and CEO of
BetOnSports.com, a large offshore
sports-wagering business, has been sentenced
to 33 months in prison for his role in
running the illegal gambling operation.
In April, David Carruthers pleaded guilty in
U.S. District Court for the Eastern District
of Missouri to one count of racketeering
conspiracy. He was the first major defendant
in the U.S. Department of Justice's
prosecution of BetOnSports officials to
plead guilty, and he agreed to testify
against the other defendants, the DOJ said
in a press release.
In November, BetOnSports founder Gary
Stephen Kaplan was sentenced to 51 months in
prison on multiple charges. Kaplan also
agreed to forfeit US$43.7 million as part of
his plea agreement, made Aug. 14.
Kaplan hired U.K. citizen Carruthers as CEO
of BetOnSports.com in about June 2000.
The DOJ has targeted BetOnSports, which was
based in Costa Rica, for running an illegal
Internet-based gambling operation. Online
gambling is illegal in the U.S.
BetOnSports advertised "heavily" to solicit
U.S. residents to place sports wagers by
telephone and over the Internet, the DOJ has
said
BetOnSports attracted a large number of U.S.
customers. By 2004, the company's
headquarters in Costa Rica employed about
1,700 people. In 2003, BetOnSports had close
to 1 million registered customers and
accepted more than 10 million bets totalling
more than $1 billion, the DOJ said.
"The prosecution and conviction of
Carruthers is significant to the
Government's efforts at enforcement of U.S.
laws against offshore Internet and telephone
sports wagering businesses, because
Carruthers was both a foreign national and a
top executive of BetOnSports," Assistant
U.S. Attorney Steven Holtshouser of the
Eastern District of Missouri said in a
statement. "Previously, executives, owners
and investors believed that they were immune
from the reach of U.S. law enforcement; even
their business plans were directly aimed at
the U.S. market.
"Both the conviction of, and sentence handed
down against Mr. Carruthers should send a
message to any foreign business conducting
illegal activities in the United States,
that geography does not render it
untouchable."
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