Online Gambling-Site Owners Busted

July 17, 2006 -- -- Internet gambling was dealt a major blow today when a federal grand jury returned a 22-count indictment against 11 people and four corporations on charges of racketeering, conspiracy and fraud, the Department of Justice announced.

Among those charged was one of the Web's most popular gambling destinations, BetonSports PLC, which owns several Internet casinos and sportsbooks, and the founder of BetonSports.com, Gary Stephen Kaplan, as well as BetonSports.com CEO David Carruthers..

Carruthers was arrested by FBI agents in Dallas on Sunday afternoon as he was returning to his home in Costa Rica from a trip to the United Kingdom. Carruthers, who was traveling with his wife, has been under investigation by a federal grand jury in Missouri, and IRS and Justice Department officials in Washington.

After word of Carruther's arrest began to circulate on the Internet this morning, shares of the publicly traded BetonSports dove almost 17 percent on the London Stock Exchange.

Later in the afternoon the Justice Department announced that Carruthers and Kaplan had been indicted by the federal grand jury in Missouri.

The indictment charged Carruthers, Kaplan and nine other individuals -- including Kaplan's brother and sister, Neil Kaplan and Lori Multz -- with tax evasion, racketeering and conspiracy. Gary Kaplan has not paid federal wagering taxes on $3.3 billion on wagers taken by the firm, according to the indictment.

Along with BetonSports.com also indicted were three Florida-based companies: Direct Mail Expertise, DME Global Marketing and Fulfillment Inc. and Mobile Promotions Inc. Four of the owners and operators associated with the Florida firms have been indicted as well.

"Illegal commercial gambling across state and international borders is a crime," said U.S Attorney Catherine Hanaway of the Eastern District of Missouri in a press release. "Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws."