BetonSports gives DOJ one fingered salute one more time

Indictments are for pussies


The American Government’s $4.5 billion question - just where did all that BetonSports.com money go? - is no closer to any kind of answer, despite months of legal wrangling.

The saga began last summer with the arrest of then CEO David Carruthers in the Dallas airport on a variety of wire fraud and racketeering charges. BetonSports.com at the time was a reputable Caribbean provider of online casino services, and Carruthers was the smiling poster child of the Caribbean online gaming industry, appearing regularly on American television and in print agitating for reform of American law to clarify the status of the online betting market.

The American Department of Justice took a rather different approach to the online betting controversy, indicting Carruthers and several other BetonSports executives - several of whom are still fugitives today – on a slew of wire fraud and racketeering charges. The case has been covered more extensively here in the past.

Now, almost eight months later, the BetonSports debacle continues to garner headlines, as US District Court Judge Carol Jackson last week imposed contempt of court fines of $5,000 per day on the company for skipping yet another court date.

At the company’s behest attorney Jeffrey Demerath skipped another hearing February 2nd- a hearing that had been scheduled appropriately enough so the company could explain why it should not be held in contempt for skipping a previous hearing, back in January. Mr. Demerath did not or could not explain to either Judge Jackson or US Attorney Michael Fagan just why he was being paid not to attend court hearings.

TFormer BetonSports executive David Carruthers wearing suit and glasses. NatWest Tower and "Gerkin' in background he BetonSports Board of Directors, which includes one member of Britain’s House of Lords, Lord Glentoran, has shown little inclination to submit to American jurisdiction, other than reaching a civil settlement with the Department of Justice to stop taking wagers from American customers. They fired David Carruthers, then CEO, only days after his arrest in the US, rather than defend him and his actions in court. Other executives, such as COO Clive Archer, fled Costa Rica after the Carruthers arrest to avoid extradition to the US and remain at large.

Lord Glentoran, a former gold medal bobsledder turned Shadow Minister for Northern Ireland, joined the BetonSports board back in 2004, and his presence on the board of a company in the middle of an Enron style meltdown has caused considerable consternation in the online gambling community. In a rambling debate in the House of Lords about gambling on the 2012 Olympics back on February 2, 2006, Lord Glentoran veered off into a discussion about the general state of online gambling at the time.

“Something over 75 per cent of betting today takes place on the Internet. Not even the Americans have managed to control the Internet in any tiny way. Our company gets 70 per cent of its revenue from North America - from sports betting on North American football league, baseball, hockey and college sport. In North America it is illegal to use the telephone wires to bet.

"There is something called the Wire Act, from 1969 or thereabouts. The Americans have been trying for a long time to enforce their regulations against such use, and they have totally and absolutely failed. They were taken by Antigua to the World Trade Organization for restriction of trade and lost - and appealed and lost again, to little Antigua. That is the power of the Internet - and most of gambling and sports betting is done through the Internet. One of the other ways in which to attack it is to attack the banks."

Although Lord Glentoran was (and is) only a non-executive member of the board, his comments, eerily prescient in some ways while smugly indifferent and misinformed in others, provide a glimpse into the thinking of internet gambling executives prior to the American crackdown. Rather than avoid the rather thin legal ice they knew themselves to be on, many took a gamble on the lucrative American market. Some, like the former Neteller executives arrested last month, got out early, and even felt secure enough to risk American travel.

Of course, that feeling of impunity has been utterly shattered by subsequent American action, and Lord Glentoran himself would be wise to avoid changing planes in Dallas, for example, unless he wants to risk the getting the Carruthers treatment from federal marshals. American authorities aren’t feeling particularly diplomatic these days. ®


Other stories you might like

  • Lonestar plans to put datacenters in the Moon's lava tubes
    How? Founder tells The Register 'Robots… lots of robots'

    Imagine a future where racks of computer servers hum quietly in darkness below the surface of the Moon.

    Here is where some of the most important data is stored, to be left untouched for as long as can be. The idea sounds like something from science-fiction, but one startup that recently emerged from stealth is trying to turn it into a reality. Lonestar Data Holdings has a unique mission unlike any other cloud provider: to build datacenters on the Moon backing up the world's data.

    "It's inconceivable to me that we are keeping our most precious assets, our knowledge and our data, on Earth, where we're setting off bombs and burning things," Christopher Stott, founder and CEO of Lonestar, told The Register. "We need to put our assets in place off our planet, where we can keep it safe."

    Continue reading
  • Conti: Russian-backed rulers of Costa Rican hacktocracy?
    Also, Chinese IT admin jailed for deleting database, and the NSA promises no more backdoors

    In brief The notorious Russian-aligned Conti ransomware gang has upped the ante in its attack against Costa Rica, threatening to overthrow the government if it doesn't pay a $20 million ransom. 

    Costa Rican president Rodrigo Chaves said that the country is effectively at war with the gang, who in April infiltrated the government's computer systems, gaining a foothold in 27 agencies at various government levels. The US State Department has offered a $15 million reward leading to the capture of Conti's leaders, who it said have made more than $150 million from 1,000+ victims.

    Conti claimed this week that it has insiders in the Costa Rican government, the AP reported, warning that "We are determined to overthrow the government by means of a cyber attack, we have already shown you all the strength and power, you have introduced an emergency." 

    Continue reading
  • China-linked Twisted Panda caught spying on Russian defense R&D
    Because Beijing isn't above covert ops to accomplish its five-year goals

    Chinese cyberspies targeted two Russian defense institutes and possibly another research facility in Belarus, according to Check Point Research.

    The new campaign, dubbed Twisted Panda, is part of a larger, state-sponsored espionage operation that has been ongoing for several months, if not nearly a year, according to the security shop.

    In a technical analysis, the researchers detail the various malicious stages and payloads of the campaign that used sanctions-related phishing emails to attack Russian entities, which are part of the state-owned defense conglomerate Rostec Corporation.

    Continue reading
  • FTC signals crackdown on ed-tech harvesting kid's data
    Trade watchdog, and President, reminds that COPPA can ban ya

    The US Federal Trade Commission on Thursday said it intends to take action against educational technology companies that unlawfully collect data from children using online educational services.

    In a policy statement, the agency said, "Children should not have to needlessly hand over their data and forfeit their privacy in order to do their schoolwork or participate in remote learning, especially given the wide and increasing adoption of ed tech tools."

    The agency says it will scrutinize educational service providers to ensure that they are meeting their legal obligations under COPPA, the Children's Online Privacy Protection Act.

    Continue reading
  • Mysterious firm seeks to buy majority stake in Arm China
    Chinese joint venture's ousted CEO tries to hang on - who will get control?

    The saga surrounding Arm's joint venture in China just took another intriguing turn: a mysterious firm named Lotcap Group claims it has signed a letter of intent to buy a 51 percent stake in Arm China from existing investors in the country.

    In a Chinese-language press release posted Wednesday, Lotcap said it has formed a subsidiary, Lotcap Fund, to buy a majority stake in the joint venture. However, reporting by one newspaper suggested that the investment firm still needs the approval of one significant investor to gain 51 percent control of Arm China.

    The development comes a couple of weeks after Arm China said that its former CEO, Allen Wu, was refusing once again to step down from his position, despite the company's board voting in late April to replace Wu with two co-chief executives. SoftBank Group, which owns 49 percent of the Chinese venture, has been trying to unentangle Arm China from Wu as the Japanese tech investment giant plans for an initial public offering of the British parent company.

    Continue reading
  • SmartNICs power the cloud, are enterprise datacenters next?
    High pricing, lack of software make smartNICs a tough sell, despite offload potential

    SmartNICs have the potential to accelerate enterprise workloads, but don't expect to see them bring hyperscale-class efficiency to most datacenters anytime soon, ZK Research's Zeus Kerravala told The Register.

    SmartNICs are widely deployed in cloud and hyperscale datacenters as a means to offload input/output (I/O) intensive network, security, and storage operations from the CPU, freeing it up to run revenue generating tenant workloads. Some more advanced chips even offload the hypervisor to further separate the infrastructure management layer from the rest of the server.

    Despite relative success in the cloud and a flurry of innovation from the still-limited vendor SmartNIC ecosystem, including Mellanox (Nvidia), Intel, Marvell, and Xilinx (AMD), Kerravala argues that the use cases for enterprise datacenters are unlikely to resemble those of the major hyperscalers, at least in the near term.

    Continue reading

Biting the hand that feeds IT © 1998–2022