Double Down

Gary Kaplan put all of his chips on BETonSPORTS and drew the worst hand of his life. Now hes making tuna casserole in a St. Louis jail.

On May 25, during Kaplan's first detention hearing, his father-in-law, a rubber-products magnate, took the stand and offered to put up his two vacation homes in Colorado and Florida, a combined value of $7 million, as collateral for Kaplan's bond. "I have total faith and confidence in my son-in-law," said Warren Hoeffner, of Tyler, Texas. "I don't think he would do anything to hurt his family, his children or me."

But Assistant U.S. Attorney Mike Fagan, a career federal prosecutor who pursued BETonSPORTS for more than four years, tried to discredit Hoeffner by claiming he loaned Kaplan seed money for BOS' early advertising campaigns. A devout Methodist who doesn't believe in gambling, Hoeffner clarified that he refused to help Kaplan — but that his wife (who enjoys gambling) had made several loans to their son-in-law.

In a subsequent court order on June 13, Judge Medler made note of Kaplan's criminal past, including convictions for cocaine possession, credit card forgery and promoting gambling in the second degree, all which Kaplan accumulated before starting up BOS. Judge Medler also noted that Kaplan owned six guns, six cars and two expensive homes in Costa Rica, and that Kaplan and his wife had numerous bank accounts, with at least $100 million at their disposal.

"On his flight from the Dominican Republic to Puerto Rico after his arrest," wrote Judge Medler, "defendant made an unsolicited statement to the FBI agents to the effect that the longer he stayed on the run from American law enforcement authorities the more he thought he could outlast the Indictment." Medler ruled to keep Kaplan behind bars at the St. Louis County Justice Center.

Kaplan's team of ten attorneys pleaded for a second hearing. His legal brain trust included famed Harvard Law professor Alan Dershowitz and two noted Texans: Chris Flood and Dick DeGuerin. DeGuerin's best known for defending cult leader David Koresh and the disgraced former congressman Tom DeLay. U.S. District Judge Carol Jackson granted the request.

And so on September 5 Kaplan was back in court asking Jackson to place him on house arrest at his sprawling Portland Place mansion in the Central West End, which Holly Kaplan purchased for $1.5 million this summer. The brandy-haired Holly, an aspiring model when she met her husband in New York City sixteen years ago, watched the proceedings anxiously, clutching a smooth "good luck" stone, a present from her eleven-year-old son.

Judge Jackson had some unusual odds to consider: What would Gary Kaplan's prominent neighbors think of his wish to place armed security guards outside his home on the private street? And, if Kaplan himself was footing the bill, wouldn't it be easier for him to flee?

DeGuerin tried to assure Jackson that off-duty cops would turn Kaplan's home into "a virtual jail," replete with motion detectors, infrared monitoring and 24-hour physical surveillance. Visitors would be searched, and the Kaplan family — frequent world travelers — would surrender their passports.

But Fagan, the prosecutor, picked apart that scheme, arguing that it would be impossible to keep Kaplan from walking, driving or even flying away. "He does own a helicopter, by the way," he pointed out.

Gary Kaplan was 34 years old, newly married with two kids and was somewhat aimless in 1993, when he moved his family from New York to South Florida. He had tried out his father's trade and even dabbled in fashion design, but with little success. Kaplan wasn't in Florida long, however, before he heard about sports bookies traveling to the Caribbean to take bets from U.S. customers.

Enticed, Kaplan journeyed to Aruba in 1995 to investigate the new industry and then launched his own sports book. Two years later, Kaplan moved his family and business to San José, Costa Rica. With minimal licensing requirements, a burgeoning bilingual middle class and a stable government, Costa Rica was fast becoming the locus of the offshore betting industry, the so-called "Wild West." Kaplan made his memorable entrance by cruising San José's streets on a motorcycle, an American flag painted on its tank.

Kaplan soon met Norm "Stormin' Norman" Steinberg, operator of the Millennium Sportsbook. The 58-year-old Philadelphian had landed in Costa Rica in 1997, reportedly trying to evade an imminent federal charge of intent to distribute more than 500,000 prescription narcotic pills from his Philly pharmacy. According to former colleagues, the acquaintance was the beginning of a fruitful partnership, especially for Kaplan.

Affectionately described by friends as "a degenerate gambler," Steinberg is well-known for his Carlton Menthol 100s addiction and a missing middle finger, which, as the story goes, he "paid" to settle a gambling debt. In Costa Rica, Steinberg apparently began betting heavily with Kaplan's BETonSPORTS — and losing. To settle his arrears, Steinberg is said to have shared Millennium's lucrative client list with Kaplan.

Among the some 200 bookmakers in Costa Rica in 1998, Kaplan swiftly distanced himself from the herd. For one thing he was a workaholic, at the office seven days a week. He rarely joined the hard-partying bookies at nearby bars. Kaplan further distinguished himself by launching a marketing assault unheard of in the industry, which typically won customers through word-of-mouth. Kaplan bought full-page ads in mainstream venues, including Maxim magazine and Pro Football Weekly. He aired regular radio spots on The Jim Rome Show. Kaplan also leased billboards around the country to display BOS' vanity phone number and Web site, and flooded potential customers' mailboxes with promotions.

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