DOJ May Drop Charges Against Gary Kaplan Family Members
Rumors abound that BetonSports founder Gary Kaplan's arrest in the Dominican Republic was no coincidence and its timing had nothing to do with the World Trade Organization decision related to the United States "illegal" online gambling ban.
"G (Gary) is a super smart guy...always has been no matter how he conducted himself," a valuable source tells Gambling911.com.
It should be noted that Gambling911.com sources warned of massive arrests on Wednesday. Approximately 12 hours after our initial report, over 70 people were arrested throughout the day Wednesday, resulting from their role in a lucrative bookmaking operation. Kaplan was arrested later that evening.
According to stories coming out of Costa Rica, Kaplan's wife wanted back in the United States. Gambling911.com can confirm that she had intended to leave Costa Rica years ago and live separately from Gary. One of the reasons Gary chose to bring his company public in fact was an "escape route". He wanted to eventually leave Costa Rica and live with his wife and children back in the States.
Our source has disclosed that Gary Kaplan was already in negotiations prior to the July indictments with the IRS to pay taxes so he could return home.
"G met in 'Dom' as a 'safe' place to negotiate with DoJ," our source adds. "(There is) some sort of deal on table including disgorgement and
dropping charges against family members."
Many industry experts questioned what Kaplan had been doing in the Dominican Republic, a country that has a strong extradition relationship with the United States and is only a short flight away from Antigua, which has demonstrated it is willing to protect online gambling operators and provide them with a safe haven. Kaplan also had strong ties to the island nation. BetonSports maintained a license and accounting facility there.
Once brimming with activity, the BetonSports reception area is now dead quiet and closed
Furthermore, another co-defendant in the BetonSports case is still at large in Costa Rica. Norm Steinberg, who ran BetonSports sister gambling firm Millennium, freely moves around in the Central American nation. Steinberg has served some prison time for a violation unrelated to internet gambling not more than two years ago.
The only other co-defendant still "on the lamb" is Peter Wilson. He is not believed to be considered a major target in this case. "Peter Wilson" (AKA Peter Wolf) is also believed to have been an alias. Wilson was turned by BetonSports executives when he attempted to find out what he should do in regard to the complaint. Wilson was merely an "employee" in the enterprise, much like some thousand others.
Gary's sister is facing a 20-year sentence if convicted. Reports suggest she was not a major figure in the BetonSports organization during her tenure there. Aside from CEO David Carruthers, none of the British Board of Directors are yet to be charged with any criminal activity despite failing to pay out millions to customers.
A brother, Neil (AKA Scott) is believed to have had little to do with BetonSports daily operations much of the time the investigation had transpired.
Neither Neil or the sister (Laurie) have any prior arrest records. Most of Gary's family members were made aware of his arrest by late Wednesday within hours of his detention.
The legal team representing Kaplan family members has been working hard to move the venue from St. Louis to Florida.
In an interesting twist, the US government has reportedly been waiting on the outcome of the World Trade Organization decision before scheduling a trial. The defendants cannot use the WTO in their defense since they were not specifically part of the complaint brought by Antigua and against the US. The United States, however, could have used the WTO decision in their favor if the World Trade Organization had not sided with Antigua. In this sense, the WTO decision does have important implications for this case.
The United States new law would be recognized as "legal" by the World Trade Organization only if they remove provisions that make horse racing legal. The WTO ruled this carve out to be "protectionism".
On the surface, the US government might not have much to fear from tiny Antigua imposing sanctions on it (no more bananas maybe, no more sugar cane). In reality, Antigua's power is much greater.
Antigua may seek sanctions in the form of withdrawing intellectual property protection for U.S. trademarks or copyright. Known as ``cross-retaliation,'' such sanctions are legal at the WTO when an economy can't afford to impose sanctions in the form of higher customs duties on goods.
``We're really hoping that as their options run out and the U.S. sees that they can't delay any more, they'll enter into negotiations with us,'' Mark Mendel, chief legal counsel to Antigua said in a telephone interview from the Caribbean.
``The writing is on the wall, and anyone who takes the time to read the report will realize it's not true'' that the ban can be justified on moral grounds, he said.
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Christopher Costigan, Gambling911.com
Originally published April 1, 2007 12:53 am ET
