Former CEO of BetOnSports.com sentenced to prison term

The former director and CEO of BetOnSports.com, a large offshore sports-wagering business, has been sentenced to 33 months in prison for his role in running the illegal gambling operation.

In April, David Carruthers pleaded guilty in U.S. District Court for the Eastern District of Missouri to one count of racketeering conspiracy. He was the first major defendant in the U.S. Department of Justice's prosecution of BetOnSports officials to plead guilty, and he agreed to testify against the other defendants, the DOJ said in a press release.

In November, BetOnSports founder Gary Stephen Kaplan was sentenced to 51 months in prison on multiple charges. Kaplan also agreed to forfeit US$43.7 million as part of his plea agreement, made Aug. 14.

Kaplan hired U.K. citizen Carruthers as CEO of BetOnSports.com in about June 2000.

The DOJ has targeted BetOnSports, which was based in Costa Rica, for running an illegal Internet-based gambling operation. Online gambling is illegal in the U.S.

BetOnSports advertised "heavily" to solicit U.S. residents to place sports wagers by telephone and over the Internet, the DOJ has said

BetOnSports attracted a large number of U.S. customers. By 2004, the company's headquarters in Costa Rica employed about 1,700 people. In 2003, BetOnSports had close to 1 million registered customers and accepted more than 10 million bets totalling more than $1 billion, the DOJ said.

“The prosecution and conviction of Carruthers is significant to the Government’s efforts at enforcement of U.S. laws against offshore Internet and telephone sports wagering businesses, because Carruthers was both a foreign national and a top executive of BetOnSports,” Assistant U.S. Attorney Steven Holtshouser of the Eastern District of Missouri said in a statement.

“Previously, executives, owners and investors believed that they were immune from the reach of U.S. law enforcement; even their business plans were directly aimed at the U.S. market.

"Both the conviction of, and sentence handed down against Mr. Carruthers should send a message to any foreign business conducting illegal activities in the United States, that geography does not render it untouchable.”

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