Federal prosecutors announced that CG technology, one of the largest sports book operators in the U.S., has agreed to pay .5 million in penalties and forfeiture to resolve criminal and civil investigations into illegal gambling and money laundering schemes.
According to Reuters, CG Technology LP had agreed to pay $16.5 million and enter into a non-prosecution agreement, three years after a former executive pleaded guilty to conspiring to participate in an illegal gambling business.
The U.S. Treasury Department’s Financial Crimes Enforcement Network separately announced a $12 million civil penalty against CG Technology, $6 million of which will be covered by the company’s criminal settlement.
The settlement is the result of an investigation that began in January 2013 and included U.S. attorneys in New York and Nevada, the U.S. Postal Service, the Internal Revenue Service and the New York City Police Department, authorities said in a press release.
Prosecutors said that the deal resolves a probe into the company’s past involvement in illegal gambling and money laundering schemes. CG Technology agreed to cooperate with the investigation and take remedial measures.
Las Vegas U.S. Attorney Daniel Bogden also said CG Technology admitted violating law by accepting messenger betting, out-of-state betting and by laundering money.
According to the statement of facts released by the Justice Department along with the settlement, the scheme involved an illegal gambling and bookmaking operation, identified by authorities as the “Jersey Boys.” The group included an unnamed Florida bettor who owned a pick-selling service, an offshore sportsbook located in Costa Rica and executives at CG Technology’s Nevada sportsbook.
From 2009 through 2012, CG Technology, then doing business as Cantor Gaming, knowingly allowed the “Jersey Boys,” to place bets at its licensed Nevada sportsbook.
Former Cantor Gaming Vice President of Risk Management Michael Colbert previously pleaded guilty to federal conspiracy charges from the case and faces up to five years imprisonment, according to ESPN.com.
Authorities said Colbert and staff would approach and encourage associates of the “Jersey Boys” to take specific sides of games that had attracted lopsided betting action, allowing the book to lay off some of its risk, ESPN reported.
Prosecutors also said Cantor Gaming offered higher betting limits than other companies and gave important bettors preferential treatment, including direct access to Colbert.
In July, Nevada gaming regulators fined CG Technology $1.5 million for inaccurate payouts and forced president and CEO Lee Amaitis to resign.
Nevada Gaming Control Board Chairman A.G. Burnett told ESPN his office is reviewing the Justice Department findings.
“As long as everything is within what we already settled with them for in 2014, then there likely won’t be any further action by the board,” Burnett said. “However, if there is something new, it could be a different story.”
