CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Recent Articles
author's picture
 

US Alleges $250 Million Laundered by WWTS Execs

22 May 2006

Editor's Note: The following article originally stated that the company WWTS is a property of Australia-based Betcorp Ltd. Following the publishing of the article, Betcorp contacted IGN to clarify that while it purchased certain assets from WWTS, it does not own the company itself. In response to the article, Betcorp issued the following statement to IGN:

"The action is against only Scott/Davis and Scott controlled entities. It should be noted that the company referred to in the press release "WorldWide Telesports, Inc., (WWTS)" has never been part of the Betcorp group. A subsidiary of Betcorp, Tasman Gaming Inc, purchased the business of www.betwwts.com from a Scott controlled company, WWTS Inc, in October 2002.

We can confirm that none of Betcorp or any of its subsidiary companies has received any notice of any action by any U.S. authority in relation to their business activities, which are carried out fully in accordance with the laws of the jurisdictions in which they operate.

It is our view that Betcorp is no more at risk now than it, and indeed every other online gaming business taking bets from US residents, has ever been.


The United States District Court for the District of Columbia on Wednesday unsealed an indictment against William Scott and Jessica Davis for alleged offenses of conspiracy and money laundering in relation to their roles in the operation of offshore betting Web site WorldWide Telesports (WWTS).

Originally filed April 2, 2005, the 12-count indictment accuses Scott, Davis and WWTS of setting up a bank account for a shell company named Soulbury Ltd. with the Royal Bank of Scotland in British Channel Island Guernsey and using the account to launder an estimated $250 million in funds obtained from illegal online gambling.

The charges facing Scott, Davis and their businesses rest upon claims that they conspired to commit offenses against the United States, "namely illegal internet and telephone gambling in violation of 18 U.S.C. § 1084, the Wager Wire Act, and use of the mail and any facility in interstate or foreign commerce to promote a business enterprise involving gambling in violation of 18 U.S.C. § 1952."

The indictment states that the defendants sought to accomplish their conspiracy by:

a)Advertising their gambling business to customers located in the United States…; b)Providing information to money transfer services and Defendant WWTS customers located in the United States…; c)The incorporation of foreign shell companies, including Defendant Soulbury, in order to conceal Defendant Scott's role in the management of Defendant WWTS and to effect the laundering of the proceeds of illegal Internet and telephone gambling; d)The use of offshore bank accounts, including an account at the Royal Bank of Scotland in Guernsey of the Channel Islands, to facilitate the laundering of the proceeds of illegal internet and telephone gambling; and e), The transfer of funds from a place outside of the United States to places inside the United States in connection with the payment of betting proceeds to persons residing in the United States.

The banking account for Soulbury Ltd. is integral to the grand jury's case. According to the indictment:

Defendant SOULBURY LTD., incorporated in the British Virgin Islands on or about September 17, 1996, is a “bearer share” corporation owned or controlled by Defendant SCOTT, “Bearer share” corporations, incorporated under the laws of “financial secrecy” jurisdictions like the British Virgin Islands, are commonly used as a means to conceal or attempt to conceal the true or beneficial owner of an offshore corporation and its bank accounts. During the time relevant to this Indictment, Defendants SCOTT and DAVIS maintained foreign bank accounts in the name of Defendant SOULBURY which they used to conceal and launder the proceeds of his illegal internet and telephone gambling.

The indictment proceeds to cite several instances dating from August of 2001 to November of 2002 in which several large fund transfers were sent to the Soulbury account with Royal Bank of Scotland in Guernsey from accounts listed under different names with various Caribbean banks. Two of these transfers--both dated November 6, 2001, one in the amount of $96,000 and the other $93,000--were sent from an Antiguan bank account listed under the name WWTS. The grand jury also provides evidence that in February of 2002 Scott and Davis faxed a "Custody Agreement" form on behalf of Soulbury on which they provided a return address of WWTS in St. John's, Antigua.

The indictment also lists two instances in November 2002 in which funds in the amount of $536,000 and $542,000 were sent from the Soulbury account to an account with a bank in Singapore. All of the transfers involving the Royal Bank of Scotland in Guernsey were facilitated via correspondent banks in New York. In addition to the transfers involving the Soulbury account, the indictment lists several instances in which U.S. residents transferred funds to WWTS.

Seven counts of the indictment claim that Davis--a resident of Antigua who "had a financial interest in and signature and other authority over a financial account in a foreign country, which account exceeded $10,000 in aggregate value"--violated international money laundering laws by failing to file necessary reports with the U.S. government.

For the defendants' alleged violations, the grand jury seeks virtually all of the proceeds from the illegal online gambling operation of WWTS as well as all of the property relating to it. This includes $250 million in U.S. funds or currency. The figure of $250 million represents the grand jury's estimate of the proceeds obtained by the defendants through the operation of their online gambling conspiracy from April 1998 to April 2005.

The grand jury also seeks all of the funds attributable to the defendants' accounts at 11 international banks as well as all of the property used to facilitate violations against the United States, including the BetWWTS Web site and all physical and intellectual property that it possesses.

The case is being prosecuted by trial attorney Mark Yost of the Asset Forfeiture and Money Laundering Section of the Criminal Division. The related civil forfeiture action is being pursued by Deputy Chief Linda Samuel, senior trial attorney Jack de Kluiver and trial attorney Robert Stapleton of the section's International Program Unit. The case is being investigated by the Internal Revenue Service Criminal Investigation's International Grand Jury Task Force.

A noteworthy element of the case is that neither Davis nor Scott resides in the United States at the moment. The indictment states that although Scott, the founder of WWTS, was born in the United States, he renounced his U.S. citizenship in or about June 2004 and has at all relevant times resided in Antigua and Netherland Antilles. Davis, however, was born in the United States and remains a citizen of the country, although in all likelihood she currently resides in Antigua. As they are based outside of U.S. jurisdiction, it is unclear how the grand jury intends to follow through with legal proceedings against the defendants.

This is not the first time that Scott, Davis and WWTS have been targeted by the U.S. government. In 1998 Scott and Davis were grouped alongside 21 offshore sports book operators against whom criminal complaints were filed by the U.S. Department of Justice. Only one individual among the group of defendants in the 1998 case returned to the U.S. to face charges--Jay Cohen of World Sports Exchange--and he was subsequently found guilty of Wire Act violations and sentenced to two and half years imprisonment. The other 20 operators, including Scott and Davis, have remained out of the reach of U.S. authorities and are therefore fugitives of the United States.

The U.S. government received assistance from the government of Guernsey in December 2003 to locate and restrain an estimated $7 million in funds from the Soulbury Ltd. account held with the Royal Bank of Scotland in Guernsey. The funds were seized in relation to a civil forfeiture action that was filed in the District of Columbia.

Antiguan government officials believe the release of the indictments is clearly linked to the World Trade Organization dispute between Antigua and the United States.

"These indictments, coming down at a time when the United States is supposed to be undertaking efforts to comply with the rulings of the WTO, are surely no coincidence," Dr. John W. Ashe, Antigua's ambassador to the WTO, explained. "It is more than just a little ironic that the United States Department of Justice has chosen to single out for prosecution a well-known gaming service provider from Antigua, a jurisdiction that has been leading global efforts to license, regulate, supervise and oversee a robust yet clean and safe gaming industry over the Internet, and the only jurisdiction to take on the United States at the World Trade Organization--and win--on this exact issue."

The Antiguan government holds the opinion that Scott and Davis have not engaged in any money laundering conduct other than by virtue of conducting the ordinary business of a licensed Antiguan gaming company. The Antiguan solicitor general and vhairman of Antigua's Financial Services Regulatory Commission, Lebrecht Hesse, has announced that the Antiguan government intends to contact the United States directly to lodge a protest over the latest action of the Department of Justice.

"Coming at a time when Antigua and the United States are expected to be working together on a reasonable solution to our dispute, these indictments announced by the Americans yesterday–which I note have been laying unsealed, in secret, since they were returned over a year ago–are pretty incredible," Hesse said. "We trust that these indictments do not represent the official position of the United States government and rather represent the work of some over-zealous prosecutor. We look forward to the U.S. administration’s prompt clarification of this most unfortunate incident."

He added, "Both of these individuals have been through the extensive due diligence process we subject all major participants in our gaming industry to, and both have been found fit and proper to conduct this kind of regulated business in Antigua. To our knowledge, Mr. Scott and Ms. Davis-Dyett have been law-abiding citizens since coming to this country some years ago."

Click here to view a copy of the indictment.

IGN will continue to monitor this case, providing commentary from leading legal experts later in the week.

US Alleges $250 Million Laundered by WWTS Execs is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com