Judicial authorities in New York announced on Monday that twelve individuals
have been charged with gambling and money laundering offences relating to the
operation of a Costa Rica-based gambling website and call centre that served
sports books in the US.
Michael J. Garcia, the US Attorney for the Southern District of New York, and
Mark J. Mershon, Assistant Director-in-Charge of the New York Office of the
Federal Bureau of Investigation, announced the unsealing of an indictment charging
the twelve on Monday, following the arrest of eight of the accused in New York,
Maryland and Massachusetts earlier that day.
The indictment, filed in Manhattan federal court, alleges that from December
2005, Carmen Cicalese operated an internet website and telephone call center,
known as a wireroom, in Costa Rica which charged United States-based sports
bookies weekly fees of approximately $15 to $30 for each gambler that the bookie
registered with the 'Cicalese Wireroom'. In return, registered gamblers were
able to place bets on sporting events at odds set by the Cicalese Wireroom via
a toll-free phone number, and through various websites maintained by the Cicalese
Wireroom, including datawager.com and betwestsports.com.
The indictment stated that the Cicalese Wireroom did not itself take an interest
in the outcome of these wagers; paying winners and collecting from losers was
the responsibility of the bookies.
US bookies are said by the authorities to have paid the fees owed to the Cicalese
Wireroom to representatives of the Cicalese Wireroom in the United States. It
is then thought that the collectors, or 'runners,' in turn transferred the money
back to the Cicalese Wireroom in various ways, including by using couriers,
debit cards, and electronic funds transfers. According to prosecutors, on one
occasion, the Cicalese Wireroom used a Pakistan-based "hawala" money
transfer organization to move money collected from United States bookies.
The Cicalese Wireroom is believed to have serviced several hundred bookies,
each of whom had registered numerous gambling customers, and received millions
of dollars in revenue.
All twelve defendants were charged with gambling and with conspiracy to engage
in gambling.
Fearing that online gambling operations based offshore could act as a conduit
for money launderers and financiers of terrorism, the Bush administration has
led a crackdown on foreign operators in the US. The Unlawful Internet Gambling
Enforcement Act, passed by Congress in 2006, effectively shut down the US industry
for these companies by prohibiting the use of payment instruments by financial
institutions to handle the processing of any form of internet gambling that
is illegal under US federal or state law.
The government has also not shied away from pursuing some of the biggest names
in the industry, such as BetonSports, the UK-and Costa Rica- based company formerly
listed on the London Stock Exchange, which pleaded guilty to racketeering charges
in May 2007.
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