30th of November 2012 Author: Glo Wood
A long running and secretive investigation managed by federal agencies and Nevada gaming regulators, in which prosecutors charged now defunct Las Vegas betting firm Jacktrade LLC with routing sports bets illegally through offshore sites, culminated this week when Jacktrade admitted to a violation of the Federal Wire Act in 2007.
Government asset forfeiture suit that was locked down under "super seal" to protect grand jury and wiretap information as well as cooperating witnesses in the investigation initiated prior to 2006, was finally unsealed in June this year and heard in a U.S. District Court on November 19.
A federal agents' raid on Youbet office in 2007 cast Jacktrade and sister company International Racing Group (IRG) into the public eye. Actually, Youbet had acquired IRG two years prior for $3 million but shut down the company following the raid, and in June 2010 Youbet was bought for $131 million by Churchill Downs Inc.
During an investigation into Jeffrey and Michael Jelinsky, sentenced to prison in 2009 for processing millions of dollars in bets from clients through offshore accounts and terrestrial casinos in Southern Nevada, federal agencies picked up on IRG which reportedly facilitated only betting on horse and dog tracks while Nevada gaming regulators claimed customers placed telephonic bets which were processed through an office in Curacao.
In another twist, Michael Jelinsky allegedly set up IRG customer accounts using his own Social Security number: "This allows Michael to claim gambling losses that were not his own and to create a tax windfall (generally in excess of $1 million) for himself at the end of each year. Additionally, this enables Michael's customers to remain anonymous and avoid filing any IRS documents," a court declaration said.
Court records claim that wire payments from an IRG account to customers totaled $29.3 million over a period of two-years with 70 percent of that going into Nevada residents' accounts.
Finally, JackTrade plea bargain with the authorities agrees to forfeit over $2 million in cash and other assets seized more than five years ago. As part of the settlement the IRG co-owners Louis Tavano, who was in violation of federal law when operating IRG from his home taking bets from Nevada residents although not licenced by the NGC, Richard Tavano and James Scott, will escape criminal charges.
As the U.S. Attorney for Nevada, Daniel Bogden said: ''Such illegal gaming operations take business from legal gaming operations, preventing state and local governments from receiving important tax revenue, and serve as a major source of income for organized criminal groups, both in the United States and abroad.''
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