11 Charged In Web Gambling Crackdown

BetOnSports CEO, Others, Arrested For Conspiracy, Fraud, Racketeering

(CBS/AP) 
Despite the move, the United States has remained Kaplan's main market, officials said. He is now living in Costa Rica and owns 15 percent of the company, according to the indictment. A warrant was issued for his arrest.

Officials said those arrested include Kaplan's brother, Neil Scott Kaplan, who handled purchasing for the company. He was arrested in Fort Pierce, Fla. Two other defendants were arrested in Miami and another was arrested in Philadelphia.

Carruthers was being held in Fort Worth after he was detained while trying to make a connecting flight Sunday from the United Kingdom to Costa Rica. A federal magistrate ordered him held until a detention hearing on Friday.

Carruthers' first appearance in court Monday lasted about 10 minutes. He was led into the courtroom in handcuffs, wearing a lime green T-shirt with the words "World Traveler" across the front, faded jeans and gray suede shoes.

Tim Evans, an attorney who appeared on Carruthers' behalf, handed him a lengthy document, adding, "You won't have time to read it all, of course."

Kevin Smith, a spokesman for BetOnSports, said Carruthers and other company officials had no idea that there was an indictment.

"Certainly had they told us, we would have been more than willing to negotiate with them and work on whatever these charges are," Smith said. "There wouldn't have been any need to nab him while he's waiting on a layover for a flight."

In April, Carruthers defended his company in an interview with Mason. "If I was doing this in the United States, it would be illegal. But I'm not. I'm doing it here in Costa Rica," he told CBS News.

Others named in the indictment include Kaplan's sister and several BetOnSports employees. The other three companies named in the indictment are based in Florida and handle promotional activity for BetOnSports.

The indictment charges Kaplan with failing to pay federal wagering excise taxes on more than $3.3 billion in U.S. wagers.

Authorities also charged that Kaplan's group fraudulently claimed that Internet and phone wagering on sporting events was legal and licensed.

Internet gambling has become a political issue in Washington.

Last week, the House passed a bill that would make it illegal for American banks and credit card issuers to make payments to online gambling sites. The bill's fate in the Senate is uncertain, in part because of exemptions granted for horse racing and state lotteries.

"If you ban online gaming, all you're going to do is drive this activity into the hands of undesirables," Carruthers told Mason in April. "And that's very, very dangerous."