FORT WORTH, Texas, July 18, 2006
11 Charged In Web Gambling Crackdown
BetOnSports CEO, Others, Arrested For Conspiracy, Fraud, Racketeering
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Play CBS Video Video Costa Rica: A Gambling Mecca Americans wager billions of dollars over the Internet, but most of the profits go elsewhere. As Anthony Mason reports, if you bet online, there is a good chance your wager is processed in Costa Rica.
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Video The Biggest Game Because Internet gambling companies can't operate in the United States, they're based in countries with looser restrictions. Anthony Mason reports from Costa Rica, where one gambling titan is located.
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David Carruthers, BETonSPORTS.com's CEO talked to CBS News in April. (CBS)
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The Justice Department is seeking the forfeiture of $4.5 billion, cars and computers from the defendants, including BetOnSports PLC and three other companies.
BetOnSports Chief Executive David Carruthers and four other defendants were arrested over the weekend. Carruthers was being prevented from boarding a flight Sunday from Texas to Costa Rica, where the company has operations.
The 22-count indictment was unsealed Monday in St. Louis, where a federal judge also ordered BetOnSports to stop accepting bets placed from within the United States.
Several of the defendants live outside the United States, which will make them hard to catch, said U.S. Attorney Catherine Hanaway in St. Louis.
"This is a tough crime to prosecute," she said.
"…It's very, very difficult to enforce United (States) law in jurisdictions that don't respect United States statutes," Rep. Jim Leach, R-Iowa, who's leading a push for tougher laws, told CBS News in April.
Among those who live abroad is Gary Stephen Kaplan, the founder of BetOnSports, which is incorporated in the United Kingdom and listed on the London Stock Exchange.
Trading of the company's shares was suspended in London on Tuesday. Shares of BetOnSports fell as much as 24 percent Monday following news of Carruthers' arrest, but they recovered to close 17 percent lower at $2.24.
In the fiscal year ending Feb. 5, BetOnSports reported a 65 percent gain in operating profit on continuing operations to $20.1 million. The company said it handled $1.77 billion worth of bets for the year, up 25 percent.
Kaplan is a former New York area bookie who moved his operations to the Caribbean after being arrested on gambling charges in New York in 1993. More than 200 companies have set up shop in Costa Rica, where the biggest attraction is they don't have to pay taxes on profits they earn outside the country, CBS News correspondent Anthony Mason reports.
©MMVI, CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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