{"id":1232,"date":"2007-03-04T09:31:25","date_gmt":"2007-03-04T14:31:25","guid":{"rendered":"http:\/\/www.joeduffy.net\/blog\/2007\/03\/how-kaplan-fled\/"},"modified":"2007-03-04T09:31:25","modified_gmt":"2007-03-04T14:31:25","slug":"how-kaplan-fled","status":"publish","type":"post","link":"https:\/\/www.joeduffy.net\/blog\/2007\/03\/how-kaplan-fled\/","title":{"rendered":"How Kaplan Fled"},"content":{"rendered":"

Gary Kaplan used to throw lavish parties in Costa Rica and plaster the name of
\nhis thriving online-gambling company on buses in New York. Now, the founder of
\nBetOnSports PLC and the multibillion-dollar industry he helped spawn are in
\nmuch-reduced circumstances \u2014 the man on the run, the industry in disarray.
\nKaplan, 48, is a fugitive from a racketeering-conspiracy and fraud indictment
\nfiled last year in U.S. District Court in St. Louis charging him with heading a
\ncriminal enterprise that illegally took in more than $3.5 billion in wagers
\nsince 2001.
\nSeveral colleagues of Kaplan also have been charged, including BetOnSports’
\nformer chief executive, David Carruthers, who was arrested at the Dallas-Fort
\nWorth airport in July during a stopover on a flight from London to the
\ncompany’s headquarters in San Jose, Costa Rica. Carruthers and several others
\ncharged in the case have pleaded not guilty and are awaiting trial.
\nKaplan’s whereabouts are unknown.
\nThe Kaplan indictment is part of a broad federal crackdown in which executives
\nfrom other foreign online-gambling operations and credit-card processing
\ncompanies also have been indicted.
\nLast October, Congress passed a law banning almost all forms of online
\ngambling. Recently, the Justice Department served subpoenas for records on the
\ninvestment banks that helped BetOn\u00adSports and other online-gambling companies
\nraise money through public stock offerings.
\nIndustry observers estimate that online wagering, which had hit about $12
\nbillion a year, is down by as much as 50 percent. BetOnSports largely has
\nclosed its operations. Federal authorities estimate that 98 percent of the
\ncompany’s business came from the United States.
\nThe saga of BetOnSports and Gary Kaplan demonstrates how some online-gambling
\nsites rose fast and crashed hard by operating at, or beyond, the edge of the
\nlaw.
\nWhile Kaplan has a checkered background that includes run-ins with law
\nenforcement, he may have gotten as far as he did in part by surrounding himself
\nwith executives like Carruthers, who came to BetOnSports with a mainstream
\nbusiness background.
\nBefore Kaplan became an international online gambling impresario, the native of
\nNew York was a bookie and had been busted in 1993 by that state’s authorities
\nfor running an illegal sports-betting operation, according to his indictment.
\nHe moved to Florida, where he allegedly continued his bookmaking operation, and
\nthen on to Aruba and Antigua before later finally settling in San Jose. The
\nCosta Rican capital, with light-handed gambling regulation and a ready work
\nforce, began attracting other online betting operations.
\nKaplan made a splash. He took over a nine-story office building in a
\nshopping-mall complex and outfitted it with a day-care center for workers’
\nchildren as well as luxurious suites and a rooftop pool for visiting high
\nrollers that BetOnSports sometimes flew in for huge galas.
\nObsessed with security
\nBetOnSports’ headquarters also housed a shooting range \u2014 a reflection of
\nKaplan’s fascination with guns and an obsession with personal security, say
\npeople who know him. He, his wife and two children routinely traveled with
\narmed bodyguards.
\nThe bodyguards were, at least in part, “an ego thing,” said Kenneth Weitzner,
\nfounder of Eye on Gambling, a website that tracks Internet gambling.
\nKaplan created the illusion that he thought went with a successful gambling
\noperation, said Weitzner, who visited Kaplan at his Costa Rican operation.
\nAnother acquaintance called Kaplan “tough and intimidating.” In one tale, he
\nsupposedly shot a computer monitor after BetOnSports lost big on a football
\ngame.
\nAs BetOnSports grew into one of the biggest online gambling companies, it tried
\nto move mainstream. Kaplan hired veteran gambling-industry executives, such as
\nCarruthers, who had worked for Ladbrokes PLC, a major British wagering company.
\nIn 2004, BetOnSports had an initial public offering in London that raised about
\n$100 million and its stock was listed on a branch of the London Exchange.
\nSites operated openly
\nWhile Internet gambling is legal in many countries, the U.S. long has contended
\nthat it violated various federal statutes \u2014 even before the specific ban was
\nenacted last fall.
\nFederal officials made periodic efforts to attack online gambling, but the
\ncompanies often managed to operate relatively freely in the U.S. BetOnSports
\nwas able to run U.S. marketing campaigns, including ads on 250 New York City
\nbuses in 2003.
\nEven as the industry soared, federal agents were building criminal cases. Some
\nof BetOnSports’ “customers” in 2002 and 2003 turned out to be undercover
\ninvestigators gathering evidence for last year’s indictment.
\nBetOnSports’ name appeared in news reports in connection with a 2005 criminal
\ncase filed by New York prosecutors against an allegedly mob-connected gambling
\noperation that was sending bets to an entity in BetOnSports’ headquarters in
\nSan Jose.
\nIn those reports, BetOnSports officials said the entity simply leased office
\nspace and was evicted after the indictment. Bet\u00adOnSports wasn’t charged in the
\nNew York case.
\nCrackdown questioned
\nSome observers find the federal government’s crackdown on Internet gambling
\ncurious, given the national explosion in casinos and lotteries in recent years.
\nThese people wonder whether the initiative will backfire by pushing gamblers to
\nless-reputable operations.
\nThe recent criminal cases and legislation are “an anti-consumer-protection
\nmovement because they’re eliminating the most reputable publicly traded
\ncompanies,” said Nelson Rose, a law professor in California who is an expert on
\ngambling laws.
\nIn recent years, BetOnSports and others, including some U.S. casino operators,
\nhad lobbied Congress to legalize online gambling, arguing that it could then be
\nregulated and taxed.
\nAs for Kaplan, he is being sought by U.S. and international law-enforcement
\nofficials, including Interpol, whose website carries a “wanted” poster for him.
\nAlthough his home was in Costa Rica, some believe he has left that country. One
\nrumor has him and his family in Israel, there on an Israeli passport.
\nIf Kaplan is apprehended or returns voluntarily to the U.S., he will have to
\nanswer the indictment filed against him in St. Louis.
\nIf convicted, he could face a lengthy prison sentence and large financial
\npenalties.
\nSource: St. Louis Today<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gary Kaplan used to throw lavish parties in Costa Rica and plaster the name of his thriving online-gambling company on buses in New York. Now, the founder of BetOnSports PLC and the multibillion-dollar industry he helped spawn are in much-reduced circumstances \u2014 the man on the run, the industry in disarray. Kaplan, 48, is a … Continue reading How Kaplan Fled<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1232","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/posts\/1232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/comments?post=1232"}],"version-history":[{"count":0,"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/posts\/1232\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/media?parent=1232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/categories?post=1232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.joeduffy.net\/blog\/wp-json\/wp\/v2\/tags?post=1232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}