Crime doesn’t pay, unless you’re a national government with the power to seize assets you deem to be the proceeds of criminal activity.
On Tuesday, Switzerland’s justice ministry announced that the Swiss government and their United States counterparts would share around $49m that formerly belonged to Gary Kaplan, the founder of defunct online sports betting operator BetOnSports.com.
For those of you not old enough to remember, BetOnSports was the Costa Rica-based online sportsbook whose CEO David Carruthers was arrested at the Houston airport in July 2006. Carruthers’ arrest marked the first shot in the US Department of Justice’s campaign against US-facing online gambling operators, which led to the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) a few months later and the exit of many US-facing betting companies.
Like Carruthers, Kaplan was eventually detained and sentenced to a lengthy stint in prison. Kaplan was also ordered to forfeit close to $50m in assets and hit with a hefty bill for unpaid taxes on his ill-gotten gains.
Swiss media reported that the US Treasury Department made a proposal in 2013 to share Kaplan’s assets – which had been held in Swiss banks – in gratitude for the Swiss government’s help in identifying and freezing Kaplan’s money. This deal was finalized the following year and the US Treasury duly forwarded $25m to the Swiss government last week.
Switzerland’s government will reportedly share around $5m of this bounty with the local government in the canton of Geneva for its assistance in executing the legal proceedings. Neither the US nor Swiss government appear all that interested in sharing any part of these funds with the legions of BetOnSports customers who lost their account deposits when the DOJ moved against the company, leading to its collapse that same year.
