More than two years after indicting a former online gambling mogul, federal prosecutors in Maryland, USA say they continue to pursue his extradition on charges of allegedly running an illegal gambling business and money laundering. Many of these activities were carried out through Malta-based companies, as this newspaper had reported back in 2012.
The new disclosure, made a week ago in US District Court in Maryland, is contained in the first filing in the case since Calvin Ayre, 53, and others associated with his Bodog.com operation were indicted in February 2012.
All four defendants remain at large, and Ayre - who is a Canadian citizen - is listed as one of the US Immigration and Customs Enforcement's 'Most Wanted' fugitives for illegal betting and money laundering.
In the filing, Assistant US Attorney Richard C. Kay asks for the case to be marked as administratively closed while extradition proceedings play out. Kay wrote that in July, he and a defence attorney had reached an agreement in principle to resolve the case but were unable to finalize it.
"The parties intend to continue to try to find a resolution that will not require extradition of the defendants, but, in the meantime, I am pursuing extradition," wrote Kay, who added that Ayre is believed to be in Canada or Antigua. "Because that process can take a number of years, I am respectfully suggesting that the case can be closed administratively until there is a need for further proceedings."
Several Malta-based companies implicated in scam
The indictment alleged that Bodog and its conspirators moved at least $100 million from offshore accounts in Malta, Switzerland, England and Canada to bettors in Maryland and elsewhere, while paying US$42 million for advertising to attract US gamblers.
Transactions related to online gambling are illegal under the US Unlawful Internet Gambling Enforcement Act of 2006.
This newspaper had reported back in 2012 how United States federal prosecutors had seized a leading sports gambling website and indicted its billionaire founder for illegal gambling after a long-running investigation that had uncovered the use of Malta as a payment distribution base for the multi-billion dollar Bodog gambling empire.
With internet gambling illegal in the US, Bodog, according to US investigators, allegedly found a way to circumvent regulations to make payouts to American winners, who make up the bulk of the operation's customer base.
According to charges first filed in 2008, the scheme involved a foreign payment processor wiring funds for US winnings to an American money processor, which, in turn, distributed winnings by cheque or electronic payment to winners with no indication that the money involved was the proceeds of internet gambling.
Court documents presented as part of the IRS investigation into the Bodog internet gambling empire, which was taking in some US$6 billion in bets a year, show that at least one Malta-based company played a central role in processing such illegal gambling payouts.
US gamblers were sent a least US$100 million by wire and cheque from 2005 to 2012, the US Attorney's office said, and Maltese, or at least Malta-based, companies have been implicated in the illegal wire and cheque distributions to winners. Companies in Switzerland, England and Canada have also been implicated in this week's latest round of charges from an investigation that began as far back as 2005.
One such company is the Malta-based Stratham Finance, of which the Canadian internet gambling tycoon Calvin Ayres is still both a director and sole shareholder. Among a raft of evidence presented by the IRS, an unnamed 'cooperating individual' - a certain highly placed person at MPS Processing Ltd located in the United Kingdom - gave evidence to the effect that the company he worked for was processing payouts on behalf of Bodog, and that Stratham Finance was the financing company for Bodog.
Moreover, the individual revealed that MPS Processing had received funds from the Malta-based Stratham Finance, which would then be transferred to an American money processing company. The US company would then, according to court filings, print and mail payout cheques as directed by invoice from Stratham.
When the story that the US authorities had clamped down on Bodog broke at the end of summer 2008, and when the Malta-based Stratham Finance had been clearly implicated in the scheme, the Malta Lotteries and Gaming Authority had issued a public notice simply stating that neither Bodog nor Stratham were in possession of any licence, permit or any other form of approval from the authority to "operate, promote or abet gaming services in Malta or from Malta".
But while the processing of illegal payments destined for US winners clearly constituted abetting, so could the fact that the Bodog websites were also registered to companies in Malta.
Moreover, Bodog's former gaming websites - bodoglife.com and newbodog.com - belonged to two companies registered at the same Ta' Xbiex address as Stratham Finance.
Also registered at the same address are, in addition to Stratham Finance and the companies that hosted the websites, 11 other financing companies. A company called Bodog Music (Europe) Limited is also registered at the same address.
While it is not clear if the other companies at the address formed part of the illegal payout puzzle, all the directorships and shareholders are either Ayres himself, his partner James Philip or can be traced to the Bodog operation.