Follow Up on Carruthers' Arrest

CNN carried the story of the arrest of CEO David Carruthers and it adds some detail. This was not a spur of the moment decision, this was planned out.

Carruthers was in custody in Fort Worth, Texas, after a federal grand jury in the Eastern District of Missouri returned a 22-count indictment charging 11 individuals and four corporations on various charges of racketeering, conspiracy and fraud, the U.S. Department of Justice said in a statement.

The founder of, Gary Stephen Kaplan, 47, was also charged with 20 felony violations of federal laws, it said. A warrant has also been issued for the Kaplan's arrest.

And it doesn't stop there. This is a full out assault on online gambling companies based in other countries:

The United States has also filed a civil complaint to obtain an order requiring BETonSPORTS to stop taking sports bets from the country and to return money held in wagering accounts to account holders in the United States, the Justice Department said.

U.S. District Judge Catherine Perry issued a temporary restraining order on Monday, with a hearing in the civil case requested within 10 days.

"Illegal commercial gambling across state and international borders is a crime," U.S Attorney Catherine Hanaway of the Eastern District of Missouri said. "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."

Except that Carruthers is a British citizen whose business is situation in the UK. There is no law against taking bets from Americans, either in England or in the United States. Can we count on Tony Blair to raise a big enough stink with Bush to get this reversed? Not likely. I hope the EU and the WTO get involved in a big way and smack down our government hard for restraint of trade. In addition to the war on terrorism, we now have a war on fun.

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It just shows that they have no concept of what the internet is. I think we'll see a lot more of this as countries try to control what goes on outside their borders but can be accessed by their citizens. China blocking IPs, etc., Muslim countries (and their allies in the religious right [ just hadda say that]) wanting to put an end to internet porn, the US trying to stop internet gambling (so people can lose their money at good old fashioned physical casinos who work hard paying lobbyists and taxes, and contributions, and brib... err more contributions.

By dogmeatIB (not verified) on 18 Jul 2006 #permalink

I'm still confused as to what law they are claiming this gentleman broke. He is not a US national, he did not conduct his business on US soil, his business is not on US soil (either actually in the states or at an embassy or base worldwide).

There's a reason that there are international laws, and said laws are very specific indeed... from what I can tell this gentleman, and his company, broke none of them.

If the US wants to drive away all international tourism (along with everyone who wants to spend their own money in their own way) it's going a good route. I'm betting that Canadian and Mexican airlines are gradually getting more stop-over business. I know that Canada already profits greatly from the whole "you can't get to Cuba from here" mentality, what will happen if other North American countries take on the job of re-fueling airplanes to eliminate the possibility of passengers being arrested for no good reason?

Honestly, I have to ask the question that my friend the psychologist likes to ask "what did you *think* would happen?".

It just shows that they have no concept of what the internet is.

Well there's these tubes, see, and so when someone sends you an Internet with gambling money in one of these tubes, it, you know ... gambling's evil and with the internets getting their tubes stuffed up it, well it ...

Oh heck, I can't explain it, you'll have to ask Ted Stevens.

Heads up for Ed: Davescot has been sacked from Uncommonly Dense.

Does anyone know if you can get into legal trouble for purchasing online gambling stock?

I'm still confused -- what exactly is he being charged with? What are the relevant laws? How did he break them? I don't even understand the basis for this case.

I've read the indictment that the BBC linked to as Chris Hyland linked to above. I think that Carruthers has got himself caught in a long term chase after Kaplan, his family and businesses.

Apparently Kaplan got arrested in NYC in 92 for running an illegal betting operation. He then moved to Florida, Aruba, Antigua and lastly Costa Rica. He targeted US punters almost exclusively.

I recommend reading the indictment.

By Neutral Observer (not verified) on 18 Jul 2006 #permalink

You'd think that with all that threatens this country--especially the plots and people who require great secrecy to discover--the justice department would have much better things to do with its district attorneys. But, sigh, I guess not. When you're into fantasizing that flag burning, gay marriage, and using embryonic stem cells will bring this country to its knees, on-line gambling could certainly push the old US right over the edge.

Everyone in Britain should be outraged. Normally even friendly countries become bittered when things like this happens to their own citizens, but Tony Blair is such a tag-along without any backbone that he's going to let this one fly and try to hush everyone back home about it.

This is the equivalent of arresting Google for violating free speech by censoring keywords for their Chinese search engine. But of course the government cares not about speech and a lot about people spending money in ways that they can not control.

Hmm. You won't let us play in your garden so you can play in our ours...

Tony is not getting his way on gambling in the UK and also consider the attention John Prescott's been getting over the Millenium Dome...

Arg. typo in my post above...Meant to say " can't play in our ours..."

What does the gov't think is going to happen? That people will stop betting on sports and run out and buy lotto tickets to satisfy their gambling urge. It's just going to force the untaxed money further underground into fast Eddie the bookie's pocket. This War on gambling will solve nothing and is a waste of time, it is just another diversion to problems that truly need to be accessed in this country.

"This War on gambling will solve nothing and is a waste of time, it is just another diversion to problems that truly need to be accessed in this country."

Exactly the point. Bush has no idea of how to solve America's problems, especially the ones that he's responsible for starting. So it's time to distract the voters. Better bust another "terrorist group" while he's at it - Congressional elections are only four months away.

Betcha that Kaplan won't be coming to the US any time soon.

What the Bushies apparently wish to forget is that the US isn't the only country in the world.

I want to know how they found a grand jury willing to indict based on those rather ludicrous, seemingly trumped up charges.

Oh yeah, they forget to tell people that they don't have to vote for an indictment just because there is a law that says something is illegal.

People need to be told about the power of jury nullification so we can get the power back inthe hands of the people and out of the government.