11 Men Indicted on 114-Count, Multi Million Dollar Sports Betting Scheme
Contents
On Jan. 6, it was revealed that a federal grand jury charged 11 defendants in the U.S. with tax evasion as a result of a multi-million dollar scheme involving an illegal sports betting operation.
Who Was Involved
There are a total of 114 counts of various crimes across the 11 defendants that are outlined below. All 11 of the constituents faced one count of conspiring to operate an illegal sports betting organization and one count of conspiring to commit money laundering, in addition to the crimes below.
- Timothy J. Pughsley: 38 counts of tax evasion and four counts of money laundering.
- Christopher Burdette: six counts of tax evasion and one count of money laundering.
- Nathanael Burdetter: six counts of tax evasion and two counts of money laundering.
- Jonathan Lind: six counts of tax evasion and two counts of money laundering.
- Thomas V. Zito: six counts of tax evasion and one count of money laundering.
- Christopher Donaldson: no other crimes
- Gary L. Rapp: six counts of tax evasion and two counts of money laundering.
- Mark Giaquinto: six counts of tax evasion and two counts of money laundering.
- Matthew D. Voorhees: six counts of tax evasion and two counts of money laundering.
- David Richards: six counts of tax evasion and two counts of money laundering.
- Joshua Gentrup: six counts of tax evasion and two counts of money laundering.
Six of the 11 defendants are natives of the state of Alabama, where the indictment was filed. Pughsley, C. Burdette, N. Burdette, and Lind are of Birmingham, Alabama. Zito is from Vestavia, Alabama, and Donaldson is from Trussville, Alabama.
Rapp resides in Lakeland, Tennessee; Giaquinto, Upton, Massachusetts; Voorhees, Englewood, Colorado; Richards, Las Vegas, Nevada, and Gentrup, Athens, Georgia.
What We Know
The 11 members above are all said to be senior agents and/or founding members of Red44, a bookmaking business founded by Pughsley at least 17 years ago. Over time, bookmaking and betting activities for Red44 were conducted via an offshore server in Costa Rica, and were estimated to have accepted hundreds of millions of dollars in wagers from bettors between 2019 and 2021.
Prosecutors said Red44 operated similarly to a multilevel marketing business where bookmakers were paid a percentage of their subagents’ profits.
With help from the IRS, investigators have found that 2019 gross profits for Red44 were over $14.9 million and the organization would have owed the IRS over $6.8 million in excise tax. The following year, Red44 posted an income of $24 million, resulting in $6 million in taxes owed, but not paid, to the IRS. Then in 2021, the organization would record an income of approximately $36 million and fail to pay the IRS over $7 million in required excise tax.
This totals about $75 million in profits and $20 million in taxes over the three-year period.
U.S. Attorney Prim F. Escalona, members of the IRS Criminal Investigations, and a member of Homeland Security of Investigations, spearheaded the investigation. Assistant U.S. Attorneys Catherine Crosby, Kristen Osborne, and Ryan Rummage, are prosecuting the case.
