Nearshore Americas

US Authorities Smash Gambling Syndicate Headquartered in Costa Rica

Prosecutors in the U.S. state of New York claim they have smashed a sports gambling network that operated with its headquarters in the Costa Rican capital San Jose. Four ringleaders of the gang have been arrested, with the prosecution charging the detainees with several illegalities, including money laundering and corruption.
According to an indictment from Brooklyn District Attorney Ken Thompson, the gambling syndicate accepted millions of dollars in bets from thousands of gamblers through a series of internet sites.
All four detainees are American citizens and are identified as Gordon Mitchnick, Joseph Schneider, Arthur Rossi, and Claude Ferguson. If convicted, they could spend up to 25 years in prison. Online sports gambling is legal in Costa Rica but not in the U.S.
The San Jose office, described as the ‘wireroom’ in the indictment, was allegedly given up to $200,000 every month for paying for employee salaries, rent and other operating expenses. The network was led by Mitchnick, who regularly stayed in contact with his Costa Rica-based staff through email and WhatsApp.
Schneider and Rossi, accused of laundering payments and proceeds, acted as “Master Agents,” or affiliates who brought in accounts from a large number of clients, according to court documents. Ferguson has been accused of collecting and distributing profits. “He also participated in money laundering. On at least one occasion, he traveled between U.S. airports with a suitcase filled with over $50,000 in cash,” say prosecutors.
They used a variety of methods to launder payments and proceeds, including transporting, transmitting and transferring of cash, electronic wire transfers and other financial transactions. Bets were placed directly over the internet or by calling various toll-free numbers.
The investigation found that Mitchnick had purchased over 20 houses as a means to launder gambling proceeds. It was not clear how much money was handled over the life of the operation or for how long it existed.
“To maximize profits, the enterprise relied on economy of scale and consistently solicited new clients of all sizes through word of mouth and a website showcases sports gambling pages,” the Attorney’s office stated in a press release.

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Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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