JACKTRADE PLEADS GUILTY TO ILLEGAL GAMBLING CHARGE
29th November, 2012 at 03:57:52
US betting firm forfeits $2 million seized in 2007 raid in plea bargain
The Las Vegas Sun (LVS) reports on the culmination of what it describes as a "long and secretive" investigation into a now defunct Las Vegas betting firm who pleaded guilty to an illegal offshore sports wagering charge earlier this month.
A Government asset forfeiture suit which was kept under strict seal to protect witnesses, wiretap information and grand jury information which was generated from the long-running investigation, thought to have been initiated prior to 2006, was finally unsealed in June of this year and heard in a USA Di strict Court on November 19 in which Las Vegas betting firm Jacktrade LLC admitted to a violation of the Federal Wire Act in 2007.
The investigation which was managed by federal agencies and Nevada gaming regulators led to prosecutors charging Jacktrade LLC with routing sports bets illegally through offshore sites.
Going back to 2007, a raid on Youbet.com office's led by federal agents cast Jacktrade and sister company International Racing Group (IRG) into the public eye. Youbet had acquired IRG two years prior for a $3 million consideration along with an additional payment based on its performance but shut down the company following the raid on its premises.
In June 2010, Youbet was bought by Churchill Downs Inc. who paid a $131 million consideration.
Federal agencies picked up on IRG during an investigation into Jeffrey and Michael Jelinsky, who were sentenced to prison in 2009 for processing millions of dollars in bets from clients through offshore accounts and terrestrial casinos in Southern Nevada.
While IRG maintained it only facilitated betting at horse and dog tracks, Nevada gaming regulators claimed customers placed telephonic bets which were processed through an office in Curacao. IRG's incentive to push the wagering business was to receive the additional payment based on performance agreed in the Youbet acquisition deal.
In another twist, Michael Jelinsky allegedly set up IRG customer accounts using his own Social Security number said LVS.
"This allows Michael to claim gambling losses that were not his own and to create a tax windfall (generally in excess of $1 million) for himself at the end of each year," a court declaration said. "Additionally, this enables Michael's customers to remain anonymous and avoid filing any IRS documents."
JackTrade president and one of three owners of IRG, Louis Tavano was said to be operating IRG from his home and taking bets from Nevada residents. Tavano was not licenced by the Nevada Gaming Commission and taking bets from Nevada residents to participate in offshore wagering was in violation of federal law.
According to court records, wire payments from an IRG account to customers totaled $29.3 million over a period of two-years with 70% of that going into Nevada residents' accounts.
JackTrade LLC's plea bargain with the authorities agrees to forfeit over $2 million in cash and other assets seized more than five years ago. Louis Tavano, Richard Tavano and James Scott, the co-owners of IRG, will seemingly escape criminal charges as part of the settlement.
Daniel Bogden, the USA Attorney for Nevada said in a statement: ''Such illegal gaming operations take business from legal gaming operations, preventing state and local governments from receiving important tax revenue, and serve as a major source of income for organized criminal groups, both in the United States and abroad.''
This case, while similar in nature, is reported to be unrelated to the Queens, New York Di strict Attorney action against an alleged online sports betting ring that saw the arrest of 25 people earlier this month which included Michael Colbert, a former executive with Cantor Gaming (see previous report).
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