Dangerous Times For Bodog? Founder Calvin Ayre Talking Settlement With Feds

Calvin Ayre is still on the run. And for good reason. According to the Baltimore Sun, Assistant U.S. Attorney Richard C. Kay still wants him extradited to the United States to answer to charges filed in February 2012 against Ayre and three others associated with Bodog.

There is hope for Ayre, however. The Sun is reporting that Ayre’s attorneys have talked wth US prosecutors in an attempt to settle the case.

In the court filing on Friday, Kay said that he and one of Ayre’s attorneys had reached an initial agreement to settle the case, but never finalized the deal. “The parties intend to continue to try to find a resolution that will not require extradition of the defendants, but, in the meantime, I am pursuing extradition,” he wrote.

The detals of the proposed settlement were not mentioned in the court filing. It is a dangerous time for Bodog customers, however. When an online gambling company is in the cross-hairs of the United States government, bad things happen. PokerStars, Ultimate Bet, and Fult Tilt customers know this all too well. PokerStars was able to survive its run-in wth the feds; not so Ultimate Bet and Full Tilt.

The indictment against Ayre was returned on Feburary 22, 2012. It states:

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI); and Acting Special Agent in Charge Eric C. Hylton of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.

“Sports betting is illegal in Maryland, and federal law prohibits bookmakers from flouting that law simply because they are located outside the country,” said U.S. Attorney Rod J. Rosenstein. “Many of the harms that underlie gambling prohibitions are exacerbated when the enterprises operate over the internet without regulation.”

“Today’s indictment of Bodog Entertainment Group S.A. and its founder and operators sends a strong deterrent message to those that facilitate illegal online sports betting operations and commit crimes against our nation’s financial system,” said William Winter, Special Agent in Charge of ICE HSI in Baltimore. “The proceeds from illegal Internet gambling are sometimes used to fuel organized crime and support criminal activity. ICE HSI, together with our law enforcement partners, will disrupt and dismantle organizations that commit these crimes, regardless of their location, whether here in the United States or abroad.”

The two count indictment alleges that from at least June 9, 2005 to January 6, 2012 the defendants conducted an illegal gambling business involving online sports betting. The defendants and their conspirators allegedly moved funds from Bodog’s accounts located in Switzerland, England, Malta, Canada and elsewhere to pay winnings to gamblers, and to pay media brokers and advertisers located in the United States. The conspirators directed payment processors to send at least $100 million by wire and by check to gamblers located in Maryland and elsewhere.

According to the indictment, the conspirators allegedly caused a media broker to execute an advertising campaign to attract gamblers in the United States to the Bodog.com website. From 2005 to 2008 the conspirators allegedly paid over $42 million in costs for the advertising campaign.

“Internet gambling, along with other types of illegal e-commerce, is an area of great interest to IRS Criminal Investigation,” said Acting IRS Special Agent in Charge Eric Hylton. “Laundering money from illegal activity such as illegal internet gambling is a crime. Regardless of how the money changes hands – via cash, check, wire transfers or credit cards – and regardless of where the money is stored – in a United States financial institution or an offshore bank – we will trace the funds. IRS Criminal Investigation will vigorously investigate and recommend prosecution against the owners and operators of these illegal enterprises to the fullest extent possible.”

According to the affidavit in support of a seizure warrant, an ex-employee of Bodog stated that Bodog has hundreds of employees located in Canada and Costa Rica who handle the daily operations of taking bets, tracking sports events, customer service, website development, advertising and financial transactions. The ex-employee also identified Bodog’s top level officers and directors.