Feeds

BetonSports pleads to racketeering

Sells executives down river

Next gen security for virtualised datacentres

House of Cards BetonSports pleaded guilty earlier today to racketeering charges.

BetonSports admitted to a "pattern of racketeering acts". The plea encompasses a variety of activities, including mail and wire fraud, operating an illegal gambling business, and money-laundering, US Attorney Catherine Hanaway said. The deal provides some cover for the Department of Justice, which has come under withering criticism for its hard line approach to online gambling activities.

As always, the deal includes an agreement to cooperate against other defendants, which in this case includes supplying witnesses and evidence against founder Gary Stephen Kaplan and the other nine co-defendants, including former CEO David Carruthers. Reuters has more here.

Hanway, the US attorney for the Eastern District of Missouri, said the deal allows the company to avoid further criminal prosecution. "This plea, combined with the terms of the civil junction should put an end to the BetonSports illegal gambling empire."

Carruthers recently sought support from EU governments in his fight against American authority, after the judge in the case ruled that he can use recent WTO rulings in his defense against the US government. The EU filed a brief against the US in its long-running dispute with Antigua over cross-border gambling services, and many have speculated about when the EU would play a more active role in the dispute. The EU has the most fertile gaming market in the world right now, and several prominent executives have been arrested by American authorities.

The BetonSports case has been particularly controversial. Former CEO Carruthers was a prominent proponent of legalization and regulation of the online gambling industry, and appeared regularly on American TV advocating for the industry. Federal marshals dragged him off of a plane last year in the Dallas airport, and he has been under house arrest ever since.

The case became a case study in how not to manage a prosecution, as the heavy handed prosecution led to massive capital flight from the company, rendering the company for all practical purposes bankrupt and harming the very people the DOJ is meant to protect: American citizens. Much of the money apparently ended up in the hands of less than scrupulous Middle Eastern payment processors.

This action appears to be something of a fig leaf for the DOJ, then; the once-reputable company was effectively destroyed months ago, and the admission by the company allows the DOJ to reclaim some kind of moral high ground in this mess. The endgame against the executives should kick into high gear now that their company has cut them loose.

Only time will tell if the EU will step in and throw them a lifeline. We wouldn't bet on it. ®

Burke Hansen, attorney at large, heads a San Francisco law office

The essential guide to IT transformation

More from The Register

next story
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
Detroit losing MILLIONS because it buys CHEAP BATTERIES – report
Man at hardware store was right: name brands DO last longer
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
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.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.