When you can’t have steak, you settle for hamburger.
That’s what the FBI did 10 days ago, when it made hamburger of the breezy, sophisticated, smooth-talking chairman of BetOnLine, the Costa Rica-based online betting service that calls itself "the largest online wagering service in the world."
The steak the Feds really wanted was Gary Kaplan, aka Greg Champion, and sometimes known simply as G. He was the founder of BetOnSports. Unfortunately for the FBI, he was safely ensconced in his Costa Rica hideout, reportedly with Uzi-toting bodyguards. He moved there years ago after his native New York got too hot for comfort, and he now is a fugitive from American justice.
The FBI cannot operate freely in Costa Rica, but they still can handle Dallas and Fort Worth, and a week ago Sunday they staked out the international lounge at the Dallas-Fort Worth airport and waited for a flight from London.
When it arrived, BetOnSports chairman, David Carruthers disembarked with his wife Carol, enroute to their second home — and BetOnSports headquarters — in Costa Rica.
FBI agents interrupted their trip. They graciously allowed Mrs. Carruthers to continue on her way, but detained her husband. Known in Great Britain for his passion for stylish clothes, Carruthers was persuaded by the agents to change his Bond Street spiffery for an old orange jumpsuit, with cuffs. Handcuffs and ankle cuffs.
The following day, Carruthers; Gary Kaplan (in absentia); his brother and sister, both part of the BetOnSports operation, and both also presumably sequestered in Costa Rica; Kaplan’s BetOnSports; and six other individuals were named in a 26-page federal indictment charging them with 22 counts of racketeering, conspiracy and fraud.
This is not exactly a Las Vegas traffic ticket. It is hard to fix, although Carruthers, being a Scot by birth and a British subject, may beat the rap. That will be decided in a federal court in St. Louis, where agents started this rolling with a sting operation against BetOnSports. The feds say it was taking online bets from Americans, something that annoys the Department of Justice, which claims it violates the law through the Wire Act, now 44 years old and pre-Internet technology and the Worldwide Web.
Carruthers undoubtedly has passed through DFW on numerous occasions before, enroute to Costa Rica, without difficulty. This time the FBI, obviously tracking his moves, stepped in.
His arrest could have been timed to correspond with the U.S. Senate’s consideration of a federal ban on Internet gambling, possibly as early as this week.
The ban passed the House handily a few weeks ago, and Senate majority leader Bill Frist’s chief of staff says the boss wants to get it considered before his colleagues take their fall recess starting August 4. That gives Frist just a week to get it done — short notice — and other Senate-watchers doubt it will be considered before the break. It is not likely to be considered immediately after it, for the November elections will be close at hand by then.
As for Carruthers, he was hired by Kaplan to give the BetOnSports operation some professional business guidance, a touch of English manners, and a more wholesome presence. He was well equipped to do all three, having spent 20 years learning the ropes as an employee of Ladbroke’s, England’s big bookmaker; possessing a Master’s degree in business administration; and knowing how to string sentences together effectively, with considerable logic in some cases.
He did well with the assignment, looking the part, appearing on television talk shows, sending letters to editors. One of them, earlier this year, apparently failed to make converts in Congress but contained common sense.
"Politicians who seek to prohibit online wagering in order to prevent underage gambling and corruption," he wrote, "could address these goals more effectively through regulation."
Some in Europe, where his arrest triggered a billion dollar evaporation of stock value in online gambling operations, think David took the fall for Goliath, or G. At the very least, Carruthers’ usefulness to Gary Kaplan has been compromised seriously.
It is possible that David Carruthers could catch the full heat and wrath of the government in St. Louis.
If he does, and if things don’t go well for him, the next plane out for Costa Rica might not leave for 20 years.