Indicted (again) for online gambling

The operators of an online sportsbook,, have been indicted for money laundering, in addition to violating the Wire Act. Read the press release yourself:

The U.S. District Court for the District of Columbia unsealed an indictment yesterday against William Scott, Jessica Davis, Soulbury Ltd. and WorldWide Telesports Inc. (WWTS) for offenses related to the laundering of an estimated $250 million worth of Internet gambling wagers, Assistant Attorney General Alice S. Fisher announced today. This indictment underscores the Justice Department’s commitment to attacking illegal Internet gambling concerns by using federal anti-money laundering laws.

The 12-count indictment, filed April 7, 2005, alleges that from April 1998 through the date of the indictment, Scott and Davis operated WWTS, one of several entities through which they illegally enticed gamblers to send funds from the United States to Antigua with the intent that these funds would be used for wagers on Internet casino games and sporting events, such as the National Football League’s Super Bowl and the National Collegiate Athletic Association’s men’s basketball championship tournament, as well as baseball, hockey and other sporting events. The indictment alleges that wagers were placed by toll-free telephone numbers and through and other Internet Web sites controlled by the defendants. Soliciting such wagers over the Internet violates the Wire and Travel Acts. The indictment also alleges that by causing funds to be sent from places within the United States to places abroad with the intent to promote Wire and Travel Act violations, Scott and Davis engaged in a money laundering conspiracy.

Furthermore, the indictment specifies subsequent financial transactions made by Scott with the proceeds of this illegal gambling activity as separate money laundering violations, as well as alleges his failure to report foreign bank accounts to the Internal Revenue Service.

According to the indictment, Soulbury Ltd. is one of the “shell” corporations that Scott used to hide his personal profits from the illegal gambling enterprise, including $10 million of illegal proceeds that Scott attempted to hide in Guernsey, an independent state off the coast of France. The United States, with assistance from the Guernsey government, was able to restrain $7 million of these laundered gambling proceeds from the U.S. correspondent account of a foreign bank in a parallel civil forfeiture action filed in the District of Columbia in December 2003. Funds for wagers to be placed on, or funds paid out from, “offshore” Internet gambling sites violates U.S. law and such activities present a threat to the integrity of the country’s financial system.

Scott and Davis are fugitives. The two were previously charged in a March 20, 1998, criminal complaint filed in the U.S. District Court for the Southern District of New York, as a result of an FBI investigation into Wire Act violations for operating WWTS.

This case is being prosecuted by Trial Attorney Mark Yost of the Asset Forfeiture and Money Laundering Section of the Criminal Division. The related civil forfeiture action is being pursued by Deputy Chief Linda Samuel, Senior Trial Attorney Jack de Kluiver and Trial Attorney Robert Stapleton of the section’s International Program Unit. The case is being investigated by the Internal Revenue Service Criminal Investigation’s International Grand Jury Task Force.

U.S. NReleases : “Money Laundering Indictment Unsealed Against Major Internet…”

It seems to be a rehash of the “March Madness” indictment with a twist: money laundering. At first I thought that the feds had evidence that the sportsbook was being used to launder money for organized crime, but instead they are accusing the sportsbook operators of laundering their own profits.

I’ve already had one call from the media about this case, so we’ll see how big a story it becomes. I think that, in light of the WTO decision, this is big news, as it shows that the US is not planning to comply any time soon.

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