Utah companies, seven LV residents, face charges in online gambling case

The defendants live in Las Vegas, but two of the companies that are accused of helping carry out fraud were based in Draper, a Salt Lake City suburb, according to the indictment.

“We now have a body of information technology and strategy that can cross many jurisdictions,” U.S. Attorney Brett Tolman said at a news conference.

Virtually all Internet gambling is illegal in the United States, with some exceptions carved out for horse racing, he said.

Congress has largely exempted people who gamble online from criminal charges, but companies are prohibited from processing online bets.

The indictment claims banks issuing Visa and MasterCard credit cards were fooled into processing Internet gambling charges. Defendants also channeled Western Union wire transfers through the Philippines.

The 34-count indictment includes charges of racketeering conspiracy, bank fraud, transmission of wagers and money laundering.

The seven defendants are accused of creating three companies to conduct fraudulent credit card and wire transfers for their clients — online gaming sites based outside the U.S., the indictment said.

The first company, CurrenC and CurrenC Worldwide, based in other countries including Korea, Jamaica and the United Kingdom, processed most of the credit card and wire transfers. But two companies, Hill Financial Services and Gateway Technologies, based in Utah, and are accused of providing accounting and technical services for the illegal business and were used to track transactions, Tolman said.

An investigation is under way to determine whether employees at the Utah businesses knew they were involved in criminal activity and therefore could also face charges, he said.

“There are layers of facade that have to be pulled back and uncovered,” Tolman said.

In addition to BetUS.com, and BetOnSports the indictment mentions four other unnamed gambling Web sites as doing business with the defendants and their companies.

In March BetOnSports’ founder Stephen Kaplan was arrested in the Dominican Republic. He and Chief Executive David Carruthers face federal charges of felony racketeering and fraud in St. Louis.

There was no immediate response to an e-mail sent to Costa Rica-based BetUS.com seeking comment Friday.

The indictment seeks to recover $150 million from the defendants as well as real estate, vehicles and other assets under RICO, the federal Racketeer Influenced and Corrupt Organizations law.

None of the defendants is in custody, but all are scheduled to appear in U.S. District Court in Salt Lake City on May 30.

Tolman said the government is not seeking their detention pending the hearing because they aren’t considered flight risks or threats to the community.