Feeds

BetonSports gives DOJ one fingered salute one more time

Indictments are for pussies

Maximizing your infrastructure through virtualization

The American Government’s $4.5 billion question - just where did all that BetonSports.com money go? - is no closer to any kind of answer, despite months of legal wrangling.

The saga began last summer with the arrest of then CEO David Carruthers in the Dallas airport on a variety of wire fraud and racketeering charges. BetonSports.com at the time was a reputable Caribbean provider of online casino services, and Carruthers was the smiling poster child of the Caribbean online gaming industry, appearing regularly on American television and in print agitating for reform of American law to clarify the status of the online betting market.

The American Department of Justice took a rather different approach to the online betting controversy, indicting Carruthers and several other BetonSports executives - several of whom are still fugitives today – on a slew of wire fraud and racketeering charges. The case has been covered more extensively here in the past.

Now, almost eight months later, the BetonSports debacle continues to garner headlines, as US District Court Judge Carol Jackson last week imposed contempt of court fines of $5,000 per day on the company for skipping yet another court date.

At the company’s behest attorney Jeffrey Demerath skipped another hearing February 2nd- a hearing that had been scheduled appropriately enough so the company could explain why it should not be held in contempt for skipping a previous hearing, back in January. Mr. Demerath did not or could not explain to either Judge Jackson or US Attorney Michael Fagan just why he was being paid not to attend court hearings.

TFormer BetonSports executive David Carruthers wearing suit and glasses. NatWest Tower and "Gerkin' in background he BetonSports Board of Directors, which includes one member of Britain’s House of Lords, Lord Glentoran, has shown little inclination to submit to American jurisdiction, other than reaching a civil settlement with the Department of Justice to stop taking wagers from American customers. They fired David Carruthers, then CEO, only days after his arrest in the US, rather than defend him and his actions in court. Other executives, such as COO Clive Archer, fled Costa Rica after the Carruthers arrest to avoid extradition to the US and remain at large.

Lord Glentoran, a former gold medal bobsledder turned Shadow Minister for Northern Ireland, joined the BetonSports board back in 2004, and his presence on the board of a company in the middle of an Enron style meltdown has caused considerable consternation in the online gambling community. In a rambling debate in the House of Lords about gambling on the 2012 Olympics back on February 2, 2006, Lord Glentoran veered off into a discussion about the general state of online gambling at the time.

“Something over 75 per cent of betting today takes place on the Internet. Not even the Americans have managed to control the Internet in any tiny way. Our company gets 70 per cent of its revenue from North America - from sports betting on North American football league, baseball, hockey and college sport. In North America it is illegal to use the telephone wires to bet.

"There is something called the Wire Act, from 1969 or thereabouts. The Americans have been trying for a long time to enforce their regulations against such use, and they have totally and absolutely failed. They were taken by Antigua to the World Trade Organization for restriction of trade and lost - and appealed and lost again, to little Antigua. That is the power of the Internet - and most of gambling and sports betting is done through the Internet. One of the other ways in which to attack it is to attack the banks."

Although Lord Glentoran was (and is) only a non-executive member of the board, his comments, eerily prescient in some ways while smugly indifferent and misinformed in others, provide a glimpse into the thinking of internet gambling executives prior to the American crackdown. Rather than avoid the rather thin legal ice they knew themselves to be on, many took a gamble on the lucrative American market. Some, like the former Neteller executives arrested last month, got out early, and even felt secure enough to risk American travel.

Of course, that feeling of impunity has been utterly shattered by subsequent American action, and Lord Glentoran himself would be wise to avoid changing planes in Dallas, for example, unless he wants to risk the getting the Carruthers treatment from federal marshals. American authorities aren’t feeling particularly diplomatic these days. ®

Application security programs and practises

More from The Register

next story
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
US Social Security 'wasted $300 million on an IT BOONDOGGLE'
Scrutiny committee bods probe derailed database project
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Arrr: Freetard-bothering Digital Economy Act tied up, thrown in the hold
Ministry of Fun confirms: Yes, we're busy doing nothing
Australia floats website blocks and ISP liability to stop copyright thieves
Big Content could get the right to order ISPs to stop traffic
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.