Operator News
US – Ex-Cantor Exec pleads guilty to taking illegal bets
By Lewis - 8 October 2013
US federal prosecutors have concluded their investigation of Michael Colbert, who pleaded guilty to knowingly accepting illegal wagers. Arrested in 2012, Mr. Colbert’s plea was disclosed in federal court documents unsealed late last month.
Federal prosecutors from the US attorney’s office in the eastern district of New York filed charges alleging Mr. Colbert, a former vice president in charge of risk-management at Cantor Gaming, knowingly took bets from operatives of an alleged illegal gambling ring based in the New York City borough of Queens called the “Jersey Boys.”
Knowingly accepting bets from such operatives, known as ‘runners,’ is illegal in Nevada, one of two states, with Delaware, that allow sports betting—to prevent Nevada’s sports books from becoming vehicles for money laundering or unlawful bets from out of state.
Mr. Colbert pleaded guilty and is cooperating in an investigation that allegedly reaches farther up Cantor’s chain of command. A.G. Burnett, the chairman of the Nevada board, said in an interview last week that he believed the state’s own investigation into the illegal betting would be completed soon. The state is looking into Mr. Colbert’s conduct and whether his employer knew or should have known about it, he said.
Mr. Colbert was arrested a year ago and indicted along with 24 others as the Queens district attorney investigated an alleged illegal sports-betting ring. The allegations against Mr. Colbert, eight counts including conspiracy, corruption and money laundering, involved being an agent in a scheme to move money through illegal New York bookmakers and ultimately onto sports-betting websites.
Mr. Colbert allegedly arranged to transfer $100,000 in gambling proceeds between Las Vegas and New York in a phone conversation with a New York bookmaker, according to the indictment. Several of the people involved have pleaded guilty. Mr. Colbert pleaded not guilty to the Queens charges against him, which were dismissed about a month after he entered the guilty plea to separate charges in federal court. A spokesman for the Queens district attorney said the charges were dismissed in deference to the federal case.
After the Queens charges were filed last year, the Nevada Gaming Control Board said it was investigating potential wrongdoing by Mr. Colbert, Cantor Gaming itself and other senior executives. Cantor Gaming said at the time it hadn’t found evidence Mr. Colbert was using the company’s systems or accounts for wrongdoing.
In the recent federal charges, prosecutors said Mr. Colbert accepted the allegedly illegal bets as part of his duties running Cantor Gaming’s sports books. Prosecutors said wagers from a small number of high-stakes bettors left Cantor exposed to large potential losses. To offset the risk from those big bets, Mr. Colbert allegedly sought other bets that would cancel out the large wagers, the government said. Such countering bets are key to the operation of sports-betting books, most of which in Nevada don’t accept the kind of large bets Cantor did, because they can lead to an imbalance that exposes the book to risks. Books make their money from a fee known as the “vigorish” that is charged to each bet.
To attempt to show Mr. Colbert and other Cantor executives allegedly knew one of their bettors was illegally working on behalf of a third party, the government, in a federal court filing, described an interaction in July 2011. Mr. Colbert allegedly told a subordinate to ask the leader of the Jersey Boys whether a runner could withdraw funds from a Cantor Gaming account held for the benefit of the Jersey Boys’ leader in that runner’s name. Mr. Colbert also later recruited a runner for the Jersey Boys, the government alleges.
