Online betting mogul cops plea, coughs up $43m in gains
The slow demise of BetonSports' Gary Kaplan
Gary S. Kaplan, the founder of online gambling empire BetonSports, pleaded guilty on Friday to multiple federal charges in an agreement that required him to forfeit more than $43m in criminal proceeds.
During an appearance in federal court in St. Louis, Missouri, the 50-year-old Kaplan admitted to conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, the Wire Wager Act, and related felonies. If the plea agreement is accepted by the judge overseeing the case, he will be sentenced to 41 to 51 months in prison.
The plea is the latest, and perhaps final, blow to the once high-flying BetonSports, which actively encouraged people on US soil to wager on sporting events using the internet and toll-free phone numbers. Founded in the late 1990s, the enterprise generated revenue in excess of $1bn in 2004, had close to 1 million registered customers, and accepted more than 10 million bets, according to prosecutors.
That same year, the company made a successful public offering of stock on the London Alternative Investment Market that raised more than $100m.
The company, Kaplan, and numerous other executives were indicted in 2006. The company soon folded, costing customers between $7m and $20m, Reuters reported. The company pleaded guilty  to violations of anti-gambling statutes in 2007 and has yet to face sentencing. CEO David Carruthers has also pleaded guilty.
Kaplan was arrested in March 2007  in the Dominican Republic after eluding authorities for nine months. He has been in federal custody ever since.
Kaplan on Friday said that beginning in the mid to late 1990s, he set up business entities offshore in Aruba, Antigua, and eventually Costa Rica to provide sportsbook services to US residents. He recently caused the wire transfer of $43.65m from a Swiss bank account to a US District Court bank account.
A sentencing hearing has been scheduled for October 27. ®