Federal authorities issued a press release regarding an illegal gambling ring that took place in California. According to the documents, the operation included current and former professional athletes across different leagues who made it possible for those involved to wager a large sum of money on numerous sporting events.
This is a Big Case For Many Reasons
When comparing this case to many other illegal busts, this illegally run gambling ring doesn’t appear to be one of the larger ones. The reason why this case is worth the news and needs further examination is the parties involved.
The connection among professional athletes, an MLB coach, a baseball analyst, and other people makes the case even more interesting. According to the Department of Justice press release, the illegal gambling ring operation had five co-conspirators and an LLC listed with the defendants listed at the ages of 45-63.
The five that plead guilty to multiple federal charges are Wayne Nix, Edon Kagasoff, Howard Miller, Kenneth Arsenian, and Joseph Castelao. Former Oakland Athletics minor leaguer Wayne Nix and co-conspirator Edon Kagasoff are the main two leaders of the operation.
This all came together with the help of a call center called Sand Island Sports, which is located in Costa Rica. The leaders of the operation served as agents for Costa Rica- based sportsbook. Since the bookmaker is outside the United States, the entity secretly ran this operation without abiding by the strict rules and regulations the United States has in regard to sports betting.
All defendants involved have agreed to forfeit large sums of money to the Internal Revenue Service for back taxes and penalties as part of their plea deals. The LLC for this operation that has been charged has allegedly been operating as a cleaning service for criminal enterprises.
In a press release, customers that used this site were encouraged to bring large checks, with the promise that the checks over $10,000 would not be subjected to currency transaction reports, as is required by federal law.
What Happened in the Illegal Gambling Ring
Between 2014 and February 7, 2020, Nix, as part of his guilty plea, has stated that he has conspired with two or more individuals to help him run a business that was going against federal law. The Illegal Gambling Business Act requires violation of a predicate state law, running a sports betting operation. Nix even admitted to filing false tax returns.
They also ran an illegal operation in Los Angeles and Orange County. Nix or his agents would direct customers to set up player accounts at Sand Island Sports and set betting limits through the site.
He also got other professional athletes to become bookies. When bettors won, they would be paid, and if they lost, Nix or his agents collected the losses. There was a list of wagers from famous clients, but the biggest wager on paper was accepted on February 3, 2019, as Nix wagered a $5 million wager on the Super Bowl, according to government documents.
How Much Time Could Nix Face
Nix faces a maximum sentence of eight years in prison with three years of supervised release. Nix also faces various financial penalties but is unlikely to receive up to eight years.
The Illegal Gambling Business Act charge was given a level 12 on a scale of 1-43. A 12 is given to those who have no criminal history as a sentence could range from 10-16 months.
The tax offense was given a level of 20 with a possibility of going up two more levels due to failing to correct the false filings on the tax report. Level 22 means that would mean the baseline of the sentence could be anywhere between 41 and 51 months for a first-time offender.
The government has agreed to a two-level reduction if Nix fulfills his obligations. The gambling charge would reduce to 6-12 months, while the tax offense would reduce to 30-37 months.
Kagasoff and Castelao, who face only illegal gambling business charges, have received similar plea deals with a two-level reduction for cooperation on this matter. There are still other factors that could lead to a sentence outside of the guidelines.
The use of illegal sportsbooks has been on high alert as the American Gaming Association has asked the DOJ in a letter to crack down on illegal offshore sportsbooks this week.