NV, NY Authorities Look into Cantor Role with Offshore Wagers

by , Oct 29, 2012 | 10:00 am

A Nevada gaming regulator said Thursday that the state’s probe into illegal bookmaking and money laundering that led to the arrest of a Cantor Gaming vice president and seven others in Las Vegas includes the sports book operator itself, focusing on possible regulatory violations.

Jerry Markling, chief of enforcement for the Gaming Control Board, said Thursday that investigators in Nevada have been working with the New York City Police Department’s Organized Crime Investigation Division for the past 15 months to unravel a “large-scale bookmaking operation.”

Gaming and legal sources on Wednesday had said the matter did not involve Cantor Gaming and was unrelated to its business in Las Vegas. The company declined comment Thursday on Markling’s statement.

The illegal sports betting ring, which made use of offshore Internet betting sites, spanned five states, including Nevada. It yielded payouts of more than $50 million on horse racing, professional and college football, basketball, hockey and baseball over 18 months, authorities allege.

It also included at least one local figure linked to a previous organized crime investigation. Brandt England, 46, a widely known gambler and operator of an online sports betting website, was arrested in Las Vegas on Wednesday. England in 2008 was charged in another massive illegal gambling operation in Phoenix that authorities suspected of being tied to New York’s Bonanno crime family.

State and local authorities on Wednesday arrested 25 people nationwide on charges of conspiracy, money laundering and enterprise corruption. Authorities say each faces up to 25 years in prison if convicted.

Among those taken into custody in Las Vegas was Michael Colbert, 32, Cantor’s vice president and sports book director. Markling said state gaming regulators are trying to determine whether the allegations of illegal activities are linked to operations of the prominent, licensed sports book operator.

Cantor Gaming, an affiliate of New York-based brokerage firm Cantor Fitzgerald, operates seven books in Las Vegas, at the M Resort, Cosmopolitan of Las Vegas, The Venetian, Palazzo, Tropicana, Hard Rock and Palms.

Seven homes in Southern Nevada were searched Wednesday, and several wagering accounts were frozen, the control board said in a statement.

Markling said “multiple casinos” were involved in the Nevada investigation. He said safe deposit boxes at several casinos were searched, and $2.8 million in cash and chips were seized or secured.

Authorities also served dozens of search warrants in New York, New Jersey, Pennsylvania and California. All told, $7.6 million in cash was seized.

Colbert worked as the Cantor Gaming sports book director for four years and was arrested at his Las Vegas home by state gaming agents on a warrant filed in Queens County, N.Y. He faces eight counts of conspiracy, money laundering and enterprise corruption, and is scheduled to appear Monday in Las Vegas Justice Court.

A $150,000 cash bail was set in Justice Court on Thursday for England, one of three owners of Pinnacle Sport, an online sports gaming website. Stanley Tomchin and George Molsbarger, co-owners of Pinnacle who live in California, also were arrested.

England’s Las Vegas lawyer, David Chesnoff, said he expects England would make bail and travel to New York to face the felony charges, which include conspiracy, money laundering and enterprise corruption.

After a protracted court fight, Chesnoff in 2009 won the return of more than $250,000 Las Vegas police had seized from England in a local raid tied to the Arizona investigation.

Chesnoff said England pleaded guilty to a misdemeanor charge in the Arizona case, which authorities at the time linked to a sports wagering website in Costa Rica.

In New York, Queens County District Attorney Richard A. Brown linked illegal gambling to organized crime.

“Illegal gambling is not a victimless crime,” Brown said at a news conference Thursday. “Such unlawfully earned profits are often diverted into more insidious criminal enterprises.”

Earlier this month, Brown’s office presented its case to the grand jury, which returned a 259-page indictment charging the 25 individuals with 225 criminal counts.

According to the indictment, between April 13 and Oct. 18 the defendants conspired to acquire money illegally through operation of an unlawful gambling enterprise involving the use of Internet sites that accepted bets on sporting events.

The indictment alleged the ring used nontraditional “wire rooms” in the form of offshore, Internet-based gambling services, such as www.pinnaclesports .com, www.jazzsports.net/com, www. wager4you.com and www.playhere.ag, used by bettors and agents to place wagers.

It is alleged that the members of the enterprise used the offshore wire rooms to maintain the gambling accounts of several agents through the four websites to evade detection by law enforcement.

Colbert was named in the indictment as a money collector and agent for the illegal wagering operation, answering to a higher tier of “bookmakers” that included England. The job of the agents was to build a regular “clientele of bettors.”

The arrests come at a crucial time for the legal sports betting industry. New Jersey’s battle to legalize sports wagering is headed for a Dec. 18 court hearing in Trenton.

“It sheds light on the ambiguous position sports betting holds, where what is legal in some jurisdictions is not in others,” said David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.

“Potentially, it could have an impact on New Jersey efforts in two ways,” Schwartz said.

“It does highlight that this is still going on. People are betting but not getting the protection of a legal regime, and the states are not getting the tax benefits.”

On the other hand, Schwartz said, the indictments “show that the line between legal and illegal may or may not be that clear.”

New Jersey, which recently passed a referendum legalizing sports betting at horse racing tracks and casinos, has been sued by the four U.S. major professional sports leagues and the NCAA, saying the referendum violates the Professional and Amateur Sports Protection Act.

In 1992, Congress passed PASPA, which banned sports betting in all states except those that already allowed it. The federal law gave New Jersey an extra year to legalize sports wagering, a deadline it failed to meet.

Nevada, Delaware, Montana and Oregon are the only states that have legal sports wagering. Nevada’s casino visitors wagered more than $2.8 billion on sporting events last year, according to the Gaming Control Board.

Contact reporter Chris Sieroty at csieroty@review journal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.
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