BetonSports boss indicted by US grand jury

20-07-2006

BetonSports boss indicted by US grand jury
BetonSports has suspended its shares on the London Stock Exchange (LSE) after the internet gambling firm's chief executive, David Carruthers, was arrested in the US on conspiracy, fraud and racketeering charges yesterday.

Mr Carruthers was detained by the FBI while passing through a US airport en route from the UK to Costa Rica, where BetonSports is based. Following his detention ten other arrests were made involving four companies in total.

The US department of justice (DoJ) said that Gary Kaplan, BetonSports' founder, as well as two of his siblings, were also detained. The three other companies involved are Direct Mail Expertise, DME Global Marketing and Fulfillment and Mobile Promotions, all of which are based in Florida.

"Given the issues and uncertainties involved, until the review is complete and a fuller announcement can be made resolving the uncertainties concerning the future of the company, the board has requested the London Stock Exchange to suspend trading in the company's shares," BetonSports said in a statement released this morning.

Among the allegations listed in a statement by the DoJ are accusations that Mr Kaplan, together with Norman Steinberg, "took or caused their employees to take bets from undercover federal agents in St Louis who used undercover identities to open wagering accounts".

The accused are also indicted on charges of operating a racketeering operation which involved repeated mail fraud, wire fraud and money laundering.

"Illegal commercial gambling across state and international borders is a crime," US attorney Catherine Hanaway said.

"Misuse of the internet to violate the law can ultimately only serve to harm legitimate businesses. This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws."

Although shares in BetonSports fell by nearly 18 per cent yesterday before the company's board pulled the plug on the outward flow of money, other gambling companies who have continued trading paid the price for the current allegations leveled against BetonSports this morning.

Partygaming shares dropped by 5.5 per cent in early trading, while 888 Holdings fell by eight per cent.

Related categories: Management / Business, Banking / Finance, International / Overseas.


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