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U.S. Wins First Offshore Internet Gambling Case
NEW YORK (Reuters) - The U.S. government's efforts to stem illegal Internet betting activity outside of its borders got a boost on Monday when a federal jury for the first time convicted a man for running an offshore online sports gambling operation.
Jay Cohen, 33, a co-owner of World Sports Exchange based in Antigua, was convicted by a Manhattan federal jury for operating a sports betting business that illegally accepted bets and wagers on sporting events from Americans over the Internet and telephones.
He was the first of 22 defendants to stand trial in the government's initial prosecutions brought under the federal Wire Wager Act.
That law makes it a crime to use telephone lines in interstate or foreign commerce to place sports bets. It also outlaws the transmission of information that helps gamblers bet on sporting events and contests.
Prosecutors allege that the defendants have tried to skirt U.S. law by running their operations from jurisdictions that allow gambling, including Curacao, Panama, the Dominican Republic, Antigua and Costa Rica.
Cohen, who lives in San Francisco, faces a possible maximum prison term of five years on one count of conspiracy to violate the Wire Wager Act and two years on each of seven other related charges. He is scheduled to be sentenced on May 23 before U.S. District Judge Thomas Griesa.
According to evidence presented at the two-week trial, Cohen's company solicited Americans through an enticing Internet address www.sex.com and through a toll-free telephone number.
Prosecutors said Cohen's business also advertised in U.S. newspapers and magazines. The ads told U.S. customers they could open a betting account with the company, wire money to fund the account and then bet on American sporting events and contests.
Prosecutors said undercover FBI agents accessed the Internet sites and found information about betting on the outcomes of professional and college sporting events, such as basketball, hockey, baseball and football games.
The undercover agents then opened accounts by transferring money via Western Union. They placed wagers on the games from computers and telephones in New York.
Cohen and the other 21 defendants were indicted in 1998 for their involvement in offshore sports betting operations. Ten of the defendants previously pleaded guilty in the case and seven are still fugitives.
Among those who refuse to return to the United States is Cohen's colleague Steve Schillinger, vice president and director of wagering for World Sports Exchange.
Schillinger told Reuters late last year that the company does not believe that what it is doing is illegal and that the U.S. government does not have jurisdiction over World Sports Exchange because it is not based in the United States.
He said the operation takes annual bets of $100 million to $200 million.
NEW YORK (Reuters) - The U.S. government's efforts to stem illegal Internet betting activity outside of its borders got a boost on Monday when a federal jury for the first time convicted a man for running an offshore online sports gambling operation.
Jay Cohen, 33, a co-owner of World Sports Exchange based in Antigua, was convicted by a Manhattan federal jury for operating a sports betting business that illegally accepted bets and wagers on sporting events from Americans over the Internet and telephones.
He was the first of 22 defendants to stand trial in the government's initial prosecutions brought under the federal Wire Wager Act.
That law makes it a crime to use telephone lines in interstate or foreign commerce to place sports bets. It also outlaws the transmission of information that helps gamblers bet on sporting events and contests.
Prosecutors allege that the defendants have tried to skirt U.S. law by running their operations from jurisdictions that allow gambling, including Curacao, Panama, the Dominican Republic, Antigua and Costa Rica.
Cohen, who lives in San Francisco, faces a possible maximum prison term of five years on one count of conspiracy to violate the Wire Wager Act and two years on each of seven other related charges. He is scheduled to be sentenced on May 23 before U.S. District Judge Thomas Griesa.
According to evidence presented at the two-week trial, Cohen's company solicited Americans through an enticing Internet address www.sex.com and through a toll-free telephone number.
Prosecutors said Cohen's business also advertised in U.S. newspapers and magazines. The ads told U.S. customers they could open a betting account with the company, wire money to fund the account and then bet on American sporting events and contests.
Prosecutors said undercover FBI agents accessed the Internet sites and found information about betting on the outcomes of professional and college sporting events, such as basketball, hockey, baseball and football games.
The undercover agents then opened accounts by transferring money via Western Union. They placed wagers on the games from computers and telephones in New York.
Cohen and the other 21 defendants were indicted in 1998 for their involvement in offshore sports betting operations. Ten of the defendants previously pleaded guilty in the case and seven are still fugitives.
Among those who refuse to return to the United States is Cohen's colleague Steve Schillinger, vice president and director of wagering for World Sports Exchange.
Schillinger told Reuters late last year that the company does not believe that what it is doing is illegal and that the U.S. government does not have jurisdiction over World Sports Exchange because it is not based in the United States.
He said the operation takes annual bets of $100 million to $200 million.
. So it looks like they're going after books that are run by U.S. citizens. A drunk driver usually gets a suspended sentence for murdering someone with his car while Jay faces several years in jail for running an operation from a country where it legal to operate that kind of business and for taking wagers from willing participants.
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