US law enforcement authorities have turned their attention to tracking down remaining fugitives in their prosecution of Betonsports, the internet gambling company, after the recent arrest of founder Gary Kaplan.
Top of the wanted list is Norman Steinberg, Mr Kaplan’s alleged business partner. Mr Steinberg, 57, „owned and operated“ sports betting websites with Mr Kaplan that Betonsports bought outright in 2004 with money raised in its initial public offering, a justice department indictment says.
Mr Steinberg, who also had the aliases Tom Miller and David Norman, Mr Kaplan and others involved with Betonsports are charged with racketeering and fraud offences related to the company accepting bets on sporting events from the US, where sports gambling is largely illegal.
David Carruthers, Betonsports‘ British chief executive, has pleaded not guilty to the charges.
This is not Mr Steinberg’s first serious brush with the law.
In 1999, he was charged with two counts of possessing with intent to distribute more than half a million tablets of prescription narcotics; offences carrying a sentence of up to 31 years in the US.
According to court files from this case, he went to Costa Rica when he learntof the investigation of him in 1997.
His role at Betonsports, based in Costa Rica, allegedly began shortly afterwards, while he sought to avoid the investigation.
Drugs charges against him were dropped. He pleaded guilty to a lesser offence of failing to keep proper records – and became an informant for US law authorities.
Mr Kaplan, a former New York bookkeeper who travelled with bodyguards armed with machine guns, was arrested in the Dominican Republic about two weeks ago after more than eight months on the run. He had previously been arrested on gambling charges in 1993, but was not convicted.
Possibility of criminal connections to Betonsports‘ network of websites underlines US justice department concerns about provenance and practices of some internet gambling companies.
Betonsports failed to answer questions about Mr Steinberg’s role or history. But one person close to the company said he had founded the Millennium Group, an important arm of Betonsports acquired at the time of its IPO.
The FT has previously reported that Betonsports had been linked by US prosecutors to a website that employed associates of New York’s Gambino crime family to collect debts.
A spokesman for Betonsports had said the company had „a relationship a few years ago [with the website], which was a basic landlord-tenant relationship“.
The company also shared offices with another website involved in an investigation of the New York Bonanno crime family. Betonsports denied it had any link with that website apart from once renting offices to it. It had evicted the website company after it was named in a US indictment.
Betonsports suspended trading in its shares in December, two years after its July 2004 IPO.