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Emily D. Swoboda
 

Kaplan Seeks Dismissal of Case in Pretrial Motions

14 August 2007

Lawyers for indicted BetonSports (BoS) founder Gary Kaplan have finally filed pretrial motions in the federal case against him.

Some of Kaplan's motions, filed on Monday in the Eastern District of Missouri, are similar to those filed previously by other defendants. For instance, he is asking for a dismissal of count one of the indictment, the RICO charge, on grounds that the government fails to allege a gambling enterprise that is separate and distinct.

He is also asking for a dismissal of the entire indictment based on the World Trade Organization (WTO) ruling against the United States in its dispute with Antigua over its prohibitive I-gaming laws.

Magistrate Judge Mary Ann Medler, who is overseeing the case, has denied the defendants' motions to dismiss the RICO charges. She is reserving judgment, however, on the WTO motion.

Kaplan is charged with 21 of the 22 counts listed in the indictment, including racketeering conspiracy, transmission of wagers/wagering information, interstate transportation of gambling paraphernalia and tax evasion. Most of the other defendants, excluding Norman Steinberg, have been charged with only count one (RICO).

In light of Kaplan's multiple charges, his legal team has filed other motions to dismiss the Wire Act counts (counts 3 to 12), the Wagering Paraphernalia Act count (13) and the tax evasion charges (counts 14 to 22).

Wire Act Counts

Kaplan's lawyers argue that the government has so broadly read the Wire Act in this case that it defies the historical interpretation of the Act and serves to paint the company's activities in an illegal light.

"Under a proper reading of the statute, it is clear that the Wire Act does not apply to all transmissions that have even a tangential relation to wagering, and that limitations on the scope of the Wire Act do and must exist," court documents read.

Wagering Paraphernalia Act Count

Kaplan is charged with violating the Wagering Paraphernalia Act, which is designed to criminalize the interstate transportation of items used for the purpose of gambling. Kaplan's attorneys argue that the government has interpreted this act so broadly that it has criminalized items such as laptop computers and software, without rationalizing why these items qualify.

Tax Evasion Charges

Counts 14 to 16 charge Kaplan with tax evasion on wagers in violation of 26 U.S.C. Sec. 7201, according to which an excise tax is limited to wagers with a person residing in the United States or in a wagering pool or lottery within the same. Kaplan's attorneys argue that the government failed to allege that any wagers fall under the conditions outlined in 26 U.S.C. Sec. 7201.

Counts 17 to 22 charge Kaplan with interfering with the administration of internal revenue laws by advising bettors to deposit wagers through third-party recipients. His lawyers, however, said that funding wagering accounts through third-party recipients cannot be subject to taxation, according to law.

Kaplan also requested a change of venue to the Southern District of Florida on the grounds that Missouri has no real significance in the case other than the fact that it was the location of the original investigation and grand jury indictment.

According to court documents, Kaplan's team argued that the crimes alleged in the indictment all took place outside of Missouri--in Costa Rica and Florida--and none of the defendants lives within 500 miles of St. Louis.

In addition, Kaplan's lawyers argued that other than "sting operation" witnesses, or local FBI agents who posed as Internet gamblers, the government would be calling witnesses who reside in Florida.

Fellow defendant David Carruthers on Monday also filed an additional motion requesting a change of venue to Florida on similar grounds. While he is on house arrest in St. Louis, he asserts he is a resident of the United Kingdom.

Some of the other defendants in the case, including Tim Brown, Lori Beth Kaplan Multz, Neil Scott Kaplan, William Hernan Lenis, Monica Lenis, William Luis Lenis and Manny G. Lenis and DME Global Marketing, filed a similar motion in January, but were denied in April by Judge Carol Jackson.

Kaplan, who was arrested in March, is being held in custody in a county jail in St. Louis while he awaits trial.

Defendants Norman Steinberg and Peter Wilson are still at large.

Kaplan, who was arrested in March, is being held in custody in a county jail in St. Louis, where he awaits trial.

Defendants Norman Steinberg and Peter Wilson are still at large.

Click here to view the motion to dismiss the indictment based on the WTO ruling.

Click here to view the motion for change of venue.

Click here to view the motion to dismiss the RICO charge.

Click here to view the motion to dismiss the tax evasion charges.

Click here to view the motion to dismiss the Wagering Paraphernalia Act count.

Click here to view the motion to dismiss the Wire Act counts.

Kaplan Seeks Dismissal of Case in Pretrial Motions is republished from iGamingNews.com.
Emily D. Swoboda
Emily D. Swoboda