Feds Charge Two Las Vegas Men in Sports Betting Scheme
Two men from Las Vegas, Nevada face federal charges after an investigation reveals a covert sports betting scheme.
When it comes to investments, you have to be careful. There are swindlers out there that will try to take you for a ride and steal all your money. Unfortunately for over 600 people, falling for an investment scam was inevitable. A huge group of people were swindled by two men from Las Vegas, in a multi-million dollar sports betting scheme. John Frank Thomas III, age 75, and Thomas Joseph Becker, age 72, now face federal charges for taking millions from investors in their alleged scheme.
A federal grand jury returned an indictment of 14 counts against Thomas and Becker this week, with each man facing 13 counts of wire fraud and one count of conspiracy to commit wire fraud. According to District of Nevada US Attorney Nicholas Trutanich, the men advertised that they had expertise in sports betting and could help investors earn large returns.
The two men marketed their advice via several entities including Vegas Football Club, Vegas Basketball Club, Einstein Sports Advisory, Sports Psychometrics and several other corporations. The Department of Justice revealed during the hearing that both men said they had special insights and used strategies to be able to provide a net return of $40 to $80 on a $100 bet.
Instead of using the funds to wager and provide winnings to their investors, Becker and Thomas had created a Ponzi scheme. The Feds say that the sports betting scheme began in September 2010 and continued through August of 2019.
Thomas and Becker have been released and must now return to Las Vegas District Court in January to face the music.
Securities and Exchange Commission Involved
Thomas and Becker face not only federal charges for their actions but also a civil suit filed by the United States Securities and Exchange Commission. The SEC filed a claim against the two based on the fact that they posed as licensed investment brokers. They were able to take $13.9 million in money from investors and used the money for their own personal gain.
According to the SEC, an additional $13.2 million was spent on payments to agents who brought in new clients for investing. Very little of the money provided by the investors was actually used to place wagers on sports games.
The state in which the scheme took place, has gained a reputation as a top provider of gaming options, including sports betting. Schemes like this hurt business as well as affect the way that players perceive the sports betting industry.
Trutanich said that his office will continue to work with law enforcement and the gaming industry, including the FBI to ensure the reputation of Nevada remains intact. The AG’s office will investigate and prosecute violations of the law and help to enhance compliance programs to ensure the industry is protected.
The DOJ has revealed that the penalty per count for wire fraud and conspiracy to commit wire fraud is 20 years in prison. The penalty also includes a $250,000 fine or 2x the gross gain or loss from the offense.
There is little doubt that Thomas and Becker will be found guilty of the sports betting scheme. The two men pled guilty way back in 1990 to running a scheme involving copiers and printers which netted then around $30 million. The men were buying and leasing the machines to educational facilities. Both men spent time in prison due to this offense.
It seems they learned a bit while in prison as this covert sports betting scheme was able to go on for around nine years before anyone caught on to what the men were doing.