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Emily D. Swoboda

No Decision Reached Yet in Kaplan Detention Hearing

25 May 2007

Assistant U.S. Attorney Mike Fagan asked today that BetonSports (BoS) Founder Gary Kaplan be held without bond due to his obvious risk of flight, reciting a laundry list of reasons to support his request.

Kaplan, who was detained in March in the Dominican Republic after fleeing the indictment for eight months, was in possession of five passports from four countries at the time of his arrest, Fagan said in a federal courtroom in St. Louis, Mo.

The five passports included one from Israel in a name other than his; a U.S. passport acquired in Costa Rica for which he failed to provide his real social security number; two Peruvian passports with false names, one that belonged to a woman; and one Dominican Republic passport, according to Fagan.

In addition to the passports, Kaplan was in possession of a handcuff key and a spiral notebook, which included the details of a plan to relocate to Nicaragua where he could "escape the 22," evidently referring to 22-count indictment, Fagan said.

Fagan continued with a lengthy list of other reasons why Kaplan poses a flight risk. For instance, he has had others obtain lodging for him in names other than his own, and he carries large sums of money, in multiple currencies from countries without extradition laws, Fagan said.

Furthermore, since the July 2006 indictment of BoS, Kaplan and the 10 other defendants involved in the case, Kaplan has traveled to Israel, Venezuela and Argentina on his U.S. passport, and he admitted to bribery of authorities.

"He has experience and has done this successfully," Fagan said.

To be fair, Fagan posed the question: "Why would we let (ex-BoS CEO) David Carruthers out on house arrest and not Mr. Kaplan?"

"Kaplan has access to millions; Carruthers does not," Fagan said. "Kaplan had the means to make passports; Carruthers did not. Kaplan has a history of drug use; Carruthers does not. Kaplan has a criminal record; Carruthers does not. Kaplan violated immigration laws; Carruthers has no known violations."

Fagan also revealed that Kaplan and his wife, Holly, have concealed from pretrial services multiple offshore bank accounts, including those on the islands of Antigua and Jersey.

"He has a substantial felony record," Fagan said. "One could argue that he has committed felonies on a daily basis for the last 10 years."

"Kaplan creates a very great flight risk," Fagan added. "Two pretrial services offices in two locations have recognized this fact."

Kaplan's attorney, Dick Deguerin, who flew in on a one day recess from a case he is defending in Corpus Christi, Texas, said Kaplan believed wholeheartedly that by starting an Internet gambling company outside of the United States, in a jurisdiction where the activity was legal, he was operating legally.

Moreover, Deguerin said, Kaplan always maintained his U.S. citizenship.

The defense put Kaplan's father-in-law, Warren Hoeffner, chairman of a rubber manufacturing company in Texas, on the witness stand to testify to his willingness to relinquish two of his homes--one in Colorado, one in Florida--to pay Kaplan's bond, but his presence created an opportunity for the prosecution.

Deguerin asked Hoeffner to paint a picture of what kind of family the Kaplans are. Hoeffner described them as a very close-knit family and said the (Gary) Kaplan loves his children more than life itself. He also said they travel all over the world and he has joined them on trips to Africa and Ecuador among other places.

Kaplan was indicted in July 2006, along with Carruthers and nine other individuals, and charged with racketeering, money laundering and fraud in connection with illegal Internet gambling. In addition, Kaplan was charged with evading federal excise taxes. BoS, also named in the indictment, pled guilty on Thursday to the racketeering charges.

Kaplan's attorneys asked Judge Mary Ann Medler for more time to respond to the government's request that Kaplan be held without bond. Therefore, Kaplan's detention hearing has been continued until June 4. He will remain in custody until that time.

Meanwhile, Holly Kaplan has purchased a house in St. Louis and is in the process of moving herself and her two children to the area.

No Decision Reached Yet in Kaplan Detention Hearing is republished from
Emily D. Swoboda
Emily D. Swoboda