BROOKLYN (CN) — To avoid criminal prosecution, one of the nation's largest race and sports books with ties to financial firm Cantor Fitzgerald agreed to pay $16.5 million for claims of illegal gambling and money laundering in at least eight Las Vegas casinos.
CG Technology, formerly doing business as Cantor Gaming, agreed Monday in federal court to admit to running its scheme at the casinos from 2009 to 2013.
Cantor Gaming's former senior officer Michael Colbert pleaded guilty to conspiring to participate in an illegal gambling business, also in Brooklyn federal court. He faces up to five years in prison when sentenced.
According to prosecutors, Cantor Gaming offered higher betting limits than other sports books, and gave "important" bettors preferential treatment, like direct access to Colbert. He was responsible for setting the lines and odds for contests, and access to him meant high-rollers could sidestep the front-of-the-house workers at casinos to avoid scrutiny and suspicion.
The company also admitted that it knowingly facilitated the illegal activity of "messenger betting," or taking out-of-state bets, at its sports books, and processed large cash deposits, withdrawals and third-party wire transfers.
Under Monday's deal, the government agreed not to prosecute if the company complies to implement changes and stop the activity for at least two years.
Cantor Gaming changed its name to CG LP in January 2014, which raised suspicion among federal and state officials, leading to an investigation.
"Cantor Gaming quickly grew into one of the largest race and sports book operators in the United States. Unacceptably, this growth came at the expense of compliance with the law, and as a result Cantor Gaming became a place where at least two large-scale illegal bookmakers could launder their ill-gotten proceeds," Brooklyn U.S. Attorney Robert Capers said in a statement.
Capers added, "The non-prosecution agreement recognizes Cantor Gaming's decision to accept full responsibility, provide complete cooperation, and take remedial measures to enforce best industry practices going forward."
"CG Technology's admissions that it violated federal laws by accepting messenger betting, out-of-state betting, and processing large amounts of monies which were the proceeds of illegal activities, are significant victories for the government," Nevada's U.S. Attorney Daniel Bogden said.
Richard Weber, chief of IRS Criminal Investigation, issued a warning for any future illegal endeavors: "Cantor Gaming bet on never getting caught but this wager didn't pay off. Financial transactions always leave a money trail and IRS-CI special agents relentlessly follow that trail."
Ensnared in the scandal are the Vegas casinos that have sports books operated by Cantor Gaming: the Venetian, the Palazzo, the M Resort Spa Casino, the Hard Rock Hotel and Casino, the Tropicana, the Cosmopolitan, the Palms Casino and the Silverton Casino Hotel. The casinos are not facing charges.
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