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My last article had the beginning of a press release by the Queens County District Attorney regarding an internet gambling bust. The press release is amazing, it reads like a mafia novel. The rest of the release is below: "According to the indictment, between July 14, 2004, and November 2, 2006, the thirty defendants conspired to acquire money illegally through the operation of an unlawful gambling enterprise involving the use of an Internet website. The indictment also alleges that the ring used a non-traditional “wire room” in the form of an off-shore, Internet-based gambling service used by bettors and runners to actually place their wagers. It is alleged that the ring used the off-shore wire room to maintain the gambling accounts of numerous runners and bettors through the Internet website in an effort to evade law enforcement detection through traditional methods. Law enforcement crackdowns on traditional mob-run wire rooms have led to the use by illegal gambling rings of off-shore gambling websites where action is available around the clock. Bettors can click on an off-shore gambling website over the Internet and be assigned individual login codes and passwords. Their wagers and win-loss amounts are recorded in “sub-accounts” maintained in the accounts of “runners” and “agents.” These gambling websites typically store their information on computer servers outside the United States – such as in Costa Rica – and “bounce” their data through a series of server nodes in an effort to evade law enforcement. In carrying out the alleged conspiracy, it is charged that Primary Development, Inc., and its chief executive officer, Maurice Freeman, developed a sports betting website – www.playwithal.com – specifically tailored to meet the needs of James W. Giordano and his son-in-law, Daniel B. Clarin. The website – which is literally a computerized betting sheet – is known as “Playwithal Sportsbook” and is advertised as an “innovative sports gaming company.” Playwithal is accessible both online and via an “800” toll-free telephone number. Although the web page is hosted in Tampa, Florida, its web servers and wire room terminal are situated outside the United States – on St. Maarten in the Caribbean or, more recently, in Costa Rica. In furtherance of the alleged conspiracy, Prolexic Technologies, Inc., allegedly provided security of Playwithal’s web servers by screening bettors’ Internet protocol addresses to search for viruses or tracking programs that could be used to hack into Playwithal’s servers. Digital Solutions, S.A., a company incorporated under the laws of Costa Rica, and its American counterpart, D.S. Networks, S.A., Inc., allegedly provided the site with its servers, data and software. The indictment charges that Giordano was the “bookmaker” and boss of the enterprise who controlled and oversaw the entire operation. The indictment further charges that Clarin worked as the “controller” and was responsible for managing the day-to-day operations and handling bettor disputes and accounting discrepancies, as well as managing account information of the various runners and bettors. According to the indictment, Giordano’s wife, Priscilla Ann Giordano, and their daughter, Melissa Clarin – who is Clarin’s wife – worked as “financial officers” and facilitated the transfer of monetary instruments representing gambling proceeds through accounts under their control in financial institutions overseas and elsewhere. The indictment also charges that five defendants – Frank Lobascio, Frank LaMonica, Ralph Piccirilli, Monte Weiner, and Steven C. Tarantino – worked as “money collectors” and were responsible for exchanging, distributing, delivering and transferring gambling proceeds between members of the organization, including to and from agents/runners. Some of the collectors were also allegedly involved in exchanging, distributing, delivering and transferring gambling proceeds through various financial institutions. The indictment additionally charges that: According to the indictment, after a bettor placed a bet either through the website or through one of the organization’s toll-free telephone numbers, the bettor collected his winnings or paid any losses by interacting with an agent/runner either in person or through interstate commerce. The agent/runner, in turn, met with a money collector to turn over any gambling debts the agent/runner collected from his bettors and/or to receive any money from the money collectors that the agent/runner’s bettors won. The money collector then allegedly met with a distributor to turn over any gambling proceeds they may have collected and also to receive any winnings that the collector would then pass on to the agent with the winning bettor. The bookmaker, financial officers, accountant and other members of the organization then allegedly conducted various financial transactions with the gambling proceeds to, in part, conceal or disguise the nature, location, source or control of the gambling proceeds or to avoid any transaction reporting requirement imposed by law. The individual defendants, who were arraigned late yesterday before Queens County Supreme Court Justice Stephen Knopf, have been variously charged with Enterprise Corruption, a Class B felony punishable by a minimum of five years and a maximum of 25 years in prison; Grand Larceny in the Second Degree, a Class C felony punishable by up to 15 years in prison; and Possession of Gambling Records in the First Degree, Promoting Gambling in the First Degree and Conspiracy in the Fourth Degree, all Class E felonies, each punishable by up to four years in prison. The corporate defendants face fines of up to $10,000 or double the amount of their illegal gains. In addition to the criminal charges, a number of search warrants were executed which resulted in the seizure of gambling records, computers and hundreds of millions of dollars in real and personal property – including four Manhattan condos, millions of dollars in cash, tens of thousands of dollars worth of casino chips from the Bellagio, a rare art collection, jewelry, gold coins, and a football signed by the 1969 championship New York Jets following their victory in Super Bowl III. District Attorney Brown expressed his appreciation to the Federal Bureau of Investigation Special Agents Robert Willingham, Christopher Mangiaracini, Stuart Reynolds and Supervisory Special Agent Paul Sciolino of the Miami Office, Special Agent Dan Coxon of the Las Vegas Office and Special Agent Rick Orr of the New Jersey Office; the United States Attorney’s Office for the Southern District of Florida; Special Agents James Taylor and Olin Pierce of the Nevada Gaming Control Board Enforcement Division, the Miami-Dade Police Department, the Las Vegas Metro Police Department, the New Jersey State Police and the Connecticut State Police. The investigation was conducted by Detectives Gerard McNally, Joseph Chimienti and Luis Flores of the New York City Police Department’s Organized Crime Investigation Division under the supervision of Lieutenant Jack Iacovou and Deputy Inspector Brian O’Neill. The seizure of assets was conducted by Detective John Tansey and Sergeant Steve Scalzo of the Asset Forfeiture Unit under the supervision of Lieutenant William Hermance. Both the investigation and seizure of assets are under the overall supervision of Chief Anthony Izzo of the Organized Crime Control Bureau. Also involved in the investigation were Detective Steve Kim and former Detective Richard Sullivan of the NYPD Computer Crimes Squad under the command of Lieutenant John Otero under the overall supervision of Chief George Brown of the Detective Bureau. Assistant District Attorney Ishak Akyuz of the District Attorney’s Organized Crime and Rackets Bureau is prosecuting the case under the supervision of Assistant District Attorney Gerard A. Brave, Bureau Chief, Marc P. Resnick, Deputy Chief. The civil action is being litigated by Assistant District Attorney David S. Zadnoff of the District Attorney’s Special Proceedings Bureau under the supervision of Assistant District Attorneys Anthony M. Communiello, Bureau Chief, and Oscar W. Ruiz, Deputy Bureau Chief. Both the criminal prosecution and the civil litigation are under the overall supervision of Executive Assistant District Attorney for Investigations Peter A. Crusco and Deputy Executive Assistant District Attorney for Investigations Linda M. Cantoni. It should be noted that an indictment is merely an accusation and that defendants are presumed innocent until proven guilty." The next article has my commentary. Related Links: Posted on: November 15, 2006
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