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This is an installment in a periodic series for Legal Sports Report looking at famous sports betting cases, how the cases came together and how they eventually concluded.
This article looks at the indictment of the founders of Legendz Sportsbook. The prosecution alleged that this was one of the largest illegal sports betting operations in the history of the United States, seeing an alleged handle of upwards of $1 billion.
On March 20, 2013, US Attorney Sanford C. Coats, along with two assistant US attorneys and a trial attorney from the Department of Justice’s Organized Crime and Gang Section, filed a 95-page indictment against 34 people and 23 corporations in the Western District of Oklahoma.
The unsealing of the indictment revealed a sports betting operation that existed for more than a decade in one form or another.
Bartice “Luke” King and others were indicted for operating a sports gambling website called MVP Sports based out of San Jose, Costa Rica. In 2003, it was alleged by the US attorney that King moved the operation to Panama City, Panama, and changed the name to Legendz Sports.
In 2003, the government alleged that Legendz began operating in the Western District of Oklahoma, as well as throughout other parts of the country. That triggered state gambling law accusations in California, Colorado, Florida, Nebraska, New York, Oklahoma and Texas, in addition to federal charges under a variety of statutes including Wire Act violations, Travel Act violations, Illegal Gambling Business Act violations and money laundering charges.
King was indicted as the founder and primary officer of Legendz, along with his “executive staff,” which included:
In addition to the executives, the Feds also indicted several agents who operated in the US from Florida to California. Under the agents were four runners, who were also indicted, and five Oklahoma-based bookmakers.
In addition to the laundry list of defendants, there was a swath of companies registered in Panama and the US, and the “10 Grandchildren Foundation” were also indicted for their alleged roles in the bookmaking and money-laundering operation.
Legendz, under the direction of the indicted and unindicted conspirators, operated a variety of websites hosted on servers within the United States. These sites were alleged to “among other things, offering, facilitating and conducting unlawful computer and telephone service-based sports betting, and other forms of gambling.”
Legendz used an 800 number to take bets from US-based customers. In order to facilitate payments to US-based customers, Legendz established at least four different entities that would facilitate both deposits and payouts to bettors.
Legendz used its physical operation in Panama City to take wagers almost exclusively from US-based customers, according to the indictment. Legendz offered several services to consumers, including setting up accounts and credit arrangements for bettors.
In its 10 years of operation, Legendz was alleged to have operated 24 hours a day, 365 days a year, and brought in more than $1 billion worth of bets.
To facilitate payments, Legendz allegedly made false representations to payment services like Western Union, and processed credit and debit transactions under non-gambling related codes. That helped to avoid alerting banks and processors as to the intention of the sender.
Legendz was a licensed sportsbook operating out of Panama, and the website operated similarly to other legal gambling entities in the United States, except for the subject matter of their operation. The company offered promotional prizes on their sites; for instance, the Legendz owned www.thepig.com arranged for a motorcycle to be offered as a promotion.
By 2007, Legendz had grown so large that it opened a “state-of-the-art call center facility in Panama” to accommodate all the wagers it was taking.
Legendz even used fax machines to send transmissions directing payments to bettors and providing other instructions. By 2008, one intercepted conversation indicated that Legendz had 400 agents, and about 250 employees working at the call center.
By 2009, Serena King was applying to purchase a Maserati Quattroporte, listing her annual salary as $975,000. In 2010, she again listed her salary as just under $1 million per year in her application for the lease of a Cadillac Escalade.
The group used the bettors and agents located in the US to transfer funds to a variety of offshore companies, including those in Panama and Costa Rica. The agents would use a variety of means including cash, wire transfers, personal and business checks, credit cards and MoneyGrams to get the money to the offshore companies.
The agents in the US would then transfer money amongst themselves to pay clients their winnings across the country. Losing bettors would be instructed to send payments to offshore companies like Olmos Overseas Limited or International Gold Store.
Winning bettors would be paid with checks from companies like Can-Am, LLC. It is alleged that millions of dollars were laundered through shell companies to both pay and receive payments for Legendz.
The federal government requested forfeiture of assets totaling more than $1 billion in value, including:
The indictment contained salacious details about extravagant lifestyles of a business operation that appeared to look more like a Las Vegas sportsbook than theatrical depictions of an organized crime bookmaking operation.
But as we examine more of the Legendz case this week, we see the alleged size of the operation had little effect on the resulting trial outcomes.