The illegal betting scheme was orchestrated through a Web site called Playwithal.com, run by the poker player, James Giordano, 52, of Pine Crest, Fla., according to Police Commissioner Raymond Kelly and Queens District Attorney Richard Brown.
A break in the case came last year when investigators secretly hacked into a laptop computer that Giordano had left in a Long Island hotel while attending a wedding, police said. He was arrested early Wednesday by FBI agents who had to scale the walls of his fortess-like Florida compound.
Also arrested was Frank Falzarano, 52, of Seaford, on Long Island, identified by prosecutors as a scout for the Washington Nationals and a former scout for the San Francisco Giants. He allegedly was a top earner in a network of 2,000 bookies who took more than $3.3 billion in cash wagers since 2004 from tens of thousands of customers nationwide.
"This is the largest illegal gambling operation we have ever encountered," Kelly said at a news conference. "It rivals casinos for the amount of betting."
Though the gambling ring relied on a Web site, it was different from the online betting operations targeted by recent federal legislation. The scheme involved placing sports bets through bookies, who would assign bettors a secret code to track their wagers and monitor point spreads and results through the secured Web site. The bets were taken on all kinds of sports, including football, baseball, basketball, hockey, car racing, and golf.
The defendants allegedly laundered and stashed away "untold millions of dollars" using shell corporations and bank accounts in Central America, the Caribbean, Switzerland, Hong Kong and elsewhere, Brown said.
The prosecution is seeking the forfeiture of $500 million in assets, "among the largest such cases ever filed," Brown said.
A total of 27 people in New York, New Jersey, Florida and Nevada were charged with enterprise corruption, money laundering, promoting gambling and other counts. Giordano had waived extradition in Florida and was expected to be arraigned next week; prosecutors did not have the name of his lawyer.
Falzarano, who was ordered held on $500,000 bail after pleading not guilty, "looks forward to defending himself in court," defense attorney Peter Tomao said.
Charges also were brought against three companies that allegedly helped Giordano develop and secure the Web site: Primary Development Inc. of Farmingdale, N.Y., Prolexic Technologies Inc. of Hollywood, Fla., and Digital Networks SA Inc. of Davie, Fla.
Search warrants executed in several locations resulted in the seizure of gambling records, computers and hundreds of millions of dollars in property, some of it stashed in a secret room concealed by a bookshelf in the Manhattan home of one of the suspects.
The property includes four Manhattan condominiums, millions of dollars in cash, tens of thousands of dollars worth of casino chips from the Bellagio hotel in Las Vegas, jewelry, gold coins, and a football signed by the 1969 New York Jets following their Super Bowl victory. Also seized was original artwork by Peter Max and Salvador Dali.
Police launched the investigation last year after receiving a tip from a suspect in a separate organized crime probe. Over the next several months, detectives with computer expertise broke the code for the Web site and began electronic surveillance of the suspects.
Giordano "carried everything about the gambling enterprise on a laptop computer never let out of his sight, except when he left it at a hotel in Nassau County where he had returned this past June for a family wedding," Kelly said.
In the three hours that Giordano and his wife were at the wedding, investigators entered the hotel room with a warrant, found the laptop on a desk and made a digital copy of the hard drive without his knowledge, police said.
Giordano won a Texas Hold 'em tournament at the Bellagio worth nearly $100,000 earlier this year.