ST. LOUIS (CN) - The former CEO of BetonSports pleaded guilty to federal RICO charges involving losses of $7 million to $20 million from more than 250 gamblers. Prosecutors said David Carruthers ran the illegal gambling business through mail fraud, Wire Wager Act violations and money laundering.
Carruthers, 51, of the United Kingdom, was hired by Gary Kaplan in June 2000 as CEO of BetonSports.com and became its director in July 2004. He developed BetonSports to the extent that it could be publicly offered for sale on the AIM, a market operated by the London Stock Exchange.
Prosecutors say BetonSports falsely advertised in the United States that its operations were safe and legal, though the federal government disputed that, and told potential customers that money deposited with BetonSports was safe and could be withdrawn at any time, though BetonSports used their money to expand its business and could not repay customers more than $16 million held on account when it ceased operations in July 2006.
"Illegal sports gambling across state and international borders by telephone or internet is a crime," U.S. Attorney Catherine L. Hanaway said in a statement. "Misuse of the Internet to violate the law can ultimately only serve to harm legitimate businesses."
Carruthers faces 20 years in prison and $250,000 in fines at his Oct. 2 sentencing. Gary Kaplan, 50, is charged with numerous federal felonies, including violations of the Wire Act, RICO conspiracy, mail fraud and interstate transportation of gambling paraphernalia. He and four co-defendants are scheduled for trial in September.Follow @@joeharris_stl
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