Almost everyone prefers to fly nonstop rather than changing planes. However, sometimes we just can’t avoid it. Seasoned travelers have learned to avoid certain airports when changing planes because of delays. For one traveler, that delay may end up as 20 years.
David Carruthers, a UK citizen, needed to travel from London to San Jose, Costa Rica. You can’t fly nonstop, so he ended up changing planes at DFW. That was a mistake. Unknown to Mr. Carruthers, a federal grand jury had handed down an indictment against him on June 1st. When the US government learned he was heading to DFW, the Marshals were waiting. (Lists of all travelers from overseas heading to the US are sent to the US government just after the plane departs.)
Carruthers is an executive at Betonsports.com, an Internet sportsbook. While Betonsports may be legal under UK and Costa Rican law, it’s decidedly illegal under a wealth of US statutes, including the Wire Act. Carruthers is accused of being part of an alleged conspiracy in violation of the Wire Act, the Travailing Act, Mail Fraud, Wire Fraud, and RICO. And tax evasion, of course.
Tax evasion, you ask? If the enterprise is overseas (and there’s no dispute about that), how can it owe US taxes? Well, when the government first went after bookmakers a new tax was passed—a federal excise tax on wagering. The tax is based on wagers accepted fromUS citizens. The tax is 2% of each illegal wager. The indictment alleges around $4 billion of wagering; the tax on that is $80,000,000.
Given that this case involves a foreign national, RICO allegations, and comes just after the House passed anti-online gambling legislation, you can expect to hear a lot more about it in the coming weeks. Meanwhile, the founder of bodog.com (another online sports wagering site), Calivn Ayre, is supposed to be headed to Las Vegas for a marketing conference next week. Any bets on that?