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Never one to bet on football games or squander time and money at the track, Gary Kaplan was still one serious gambling man. In fewer than five years' time, the 48-year-old high school dropout from Brooklyn, New York, turned a pipe dream for an offshore sports book into a billion-dollar Internet empire: the Costa Rica-based BETonSPORTS.
Famous for its aggressive advertising and extravagant parties, the firm came to employ more than 2,000 people, occupying nine floors in a San José office tower. Bettors, mostly American, wagered on everything from pro basketball to university cricket, as well as offbeat "proposition bets" including, "What date will the war in Iraq begin?" and, "Who will first be arrested for wife-beating: Bobby Brown, Jean-Claude Van Damme or Dennis Rodman?"
"I'm a believer in Rodman all the way, so the odds on him were short," Kaplan told the Miami Heraldduring a rare interview in 2000. "Bobby Brown, you think maybe Whitney [Houston] will keep him in check a little bit, so we put him down at the bottom."
In 2004 Kaplan's company went public on the London Stock Exchange, raising $44 million in capital and netting proceeds and stock worth hundreds of millions of dollars not bad for the eldest son of a working-class New York garment salesman. All the while, Kaplan was betting that the U.S. Department of Justice would leave offshore Internet bookmakers alone, saying that they'd long operated under murky legal conditions.
For years U.S. lawmakers have tried to ban the $12 billion online gambling industry, which can include sports, poker and casino-style betting, and is legal in more than 80 countries. The Justice Department considers the business to be in violation of the 1961 Wire Act, which prohibits the use of a wire communication facility" to transmit bets across state or foreign borders.
Some attorneys argue, however, that the law is antiquated and applies neither to Internet gambling nor its offshore purveyors; Gary Kaplan rolled those dice for years. But it all came up snake eyes on July 17, 2006, when the U.S. Attorney's office in the Eastern District of Missouri unsealed a 22-count indictment charging him with racketeering, wire fraud, tax evasion and other crimes. Federal authorities proceeded to arrest eight of his alleged co-conspirators, among them, BETonSPORTS' Scottish CEO and two of Kaplan's siblings. The government also set about seizing more than $4.5 billion in assets including cash, Hummers and luxury RVs associated with Kaplan's gambling empire.
The economic fallout was disastrous: Just one day after the indictment, investors in other public gaming companies watched their share value plummet. BOS shut down its operations, fired its CEO and left customers in the lurch for millions of dollars. Privately owned gambling firms hastily fled one offshore location for another.
Gary Kaplan, facing 83 years in a federal prison, proceeded to travel the world in pursuit of new business ventures, even sealing a deal for a new online wagering game he called Mr. BidLow. According to court papers, he moved by air and by sea between Israel, Venezuela, Argentina, Colombia, Peru and Uruguay. Authorities do not believe he set foot in Costa Rica, where his wife, Holly Kaplan, and two young children resided under the watch of the family's personal bodyguards.
On March 27, nine months after the indictment was issued, the stocky, chestnut-haired fugitive entered the Dominican Republic and, according to court documents, checked into a hotel under the name Allan Andre Viaux. People close to Kaplan say he intended to join his family at a vacation home and enjoy one last Easter holiday together before turning himself in. But Interpol, watching his every move, arrested him the next day.
Court filings show Kaplan was carrying $11,000 in various currencies, two fake Peruvian passports, an Israeli passport issued to Meir (Gary Stephen) Kaplan and a Dominican passport in the name of Gary Stephen Kaplan Pearlman. Kaplan's attorneys explained that Kaplan had long thought of relocating to Israel by virtue of his Jewish birthright, but offered no explanation for the phony Peruvian documents.
Officials also confiscated steroids purportedly to assist Kaplan in bodybuilding and a spiral-bound notebook with a handwritten to-do list, entitled "Nicaragua: Requests." Kaplan's notes read:
(1) citizenship (2) passport (3) possible diplomatic (no questions) (4) citizenship & Passports for my family (5) asylum (written Protection from USA legal documentation all 22 counts charges). (6) landing right for helicopter. Specify location other than Major airport. (I'll pay for govt. agent to supervise) (custom agent stamp in stamp out...)
The last item to catch authorities' attention upon Kaplan's arrest was a handcuff key found in his backpack. The government contended he was previously detained in Venezuela and bribed police, receiving the key as a parting gift. Prosecutors considered it a sign that Kaplan would stop at nothing to elude law enforcement. Kaplan's attorneys, on the other hand, claimed he was kidnapped after vacationing in Venezuela with his family and that the key was a memento from the "intermediary" who secured his freedom.
Interpol swiftly transferred Kaplan from the Dominican Republic into U.S. custody at a Puerto Rico jail, where he remained for more than a month before arriving in St. Louis this past May. The government asked U.S. Magistrate Judge Mary Ann Medler to keep him locked up until trial.