The Brooklyn district attorney’s office has broken up what it’s calling a “billion-dollar sports gambling ring” that used password-protected websites and a Costa Rica-based ‘wire room.’
On Thursday, Brooklyn DA Ken Thompson announced a 57-count indictment against four individuals – including the alleged ringleader, California resident Gordon Mitchnick – who are facing up to 25 years in prison if convicted of the main charge of enterprise corruption.
Thompson said the ring operated via toll-free phone numbers and multiple ‘pay per head’ websites, including wagerabc.com, thewagerspot.com and hustler247.ag, through which customers could manage their wagering activity but all financial transactions were processed in person like traditional credit betting operations.
The ring had a customer list that numbered in the thousands, and Thompson said the sites handled $927m worth of wagers during the 2015 NFL season. Mitchnick utilized a variety of methods of laundering the ring’s betting proceeds, including buying over 20 houses.
The ring had a monthly overhead of $200k during peak betting season, much of it going to run the Costa Rica-based wire room. Mitchnick is said to have communicated with his Costa Rica staff via email, text messages and the WhatsApp messaging service.
Fellow defendant Joseph Schneider consolidated his own independent betting operation with Mitchnick’s in April 2015, for which Schneider received payments of up to $30k per month during peak betting season. The two other defendants – Arthur Rossi and Claude Ferguson – acted as master agent and ‘runner,’ respectively.
In addition to the enterprise corruption charges, the accused are charged with first-degree promoting gambling, second-degree possession of gambling records and fifth-degree conspiracy. Mitchnick’s bail was set at $2m, Schneider’s at $500k, while the other two got off relatively easy at $50k.
Thompson called the illegal betting bust “possibly the biggest one ever to be dismantled by a local prosecutor’s office.” This is the second major bust in as many months for Thompson, who recently dismantled another Costa Rica-based pay per head operation that handled $13.2m in wagers in six months.