Alabama property linked to multi-million dollar federal sportsbook case

Several properties that make up the downtown Trussville entertainment district are listed in 114 indictments over what federal prosecutors called an illegal sports betting organization.

Earlier this month, a federal grand jury indicted 11 men, including six from Alabama, for evading tens of millions of dollars in sales taxes over three years for an organization they controlled.

The 56-page indictment makes for an exciting read as prosecutors detail an elaborate organization for collecting gambling debts and avoiding detection by authorities.

Timothy J. Pewsley, 51, of Birmingham, started a bookbinder about 17 years ago and eventually became known as “Red 44,” the federal government said. The organization’s bookmaking and betting activities were conducted online through his servers offshore located in Costa Rica.

Prosecutors in the indictment say Red44 operated as a multi-level marketing operation. Bettors typically bet on credit and did not exchange money online. The platform tracked everything from odds to earnings to outstanding debt. The bookmaker was also charged a ‘per person’ fee for each active bettor his account. Most of the action occurred during the college football season.

Pughsley’s indictment lists 30 properties at addresses in Trusville, Pelham, Birmingham, Gulf Shores, and Las Vegas, Nevada. Naples, Florida; Inglewood, Colorado and Upton, Massachusetts.

Two properties listed within the Trusville Entertainment District (TED) are owned by businessman Coby Lake. Lake’s attorney, Jay Smith, said Pusley was a passive investor with no control over the property.

“I was surprised to see the properties listed in the indictment,” Smith said. “We take it seriously, but we don’t see it impacting our business.”

Trusville Mayor Buddy Chot said the city is monitoring the situation. He said Lake’s participation in TED was already significant by January 2, 2019, the start of the project, and the period covered by the indictment would begin later in the year.

“We learned about the property when the indictment was opened,” Choat said. “We are moving some new businesses into the district and will continue to move forward.”

According to prosecutors, Putley held training meetings for other members of the group, encouraged them to increase the number of bettors, compared sports betting to the sale of marijuana, and said, “Federal law prohibits gambling betting. prohibits the transfer of funds related to

At the August 2019 conference in Chicago, Pughsley told attendees during the previous fiscal year that the group had a roster of more than 15,000 bettors, with about 7,800 a week during the football season. He said he had a bettor. According to the indictment, his average loss per bettor was $983.

Prosecutors say that, based on these figures, the Red44 organization made $14.9 million in gross profits that year and incurred approximately $6.8 million in excise taxes. A year later, at a conference in Nashville, the organization estimated his stake at $300 million. By 2021, Red44 has brought in around $352 million in stakes.

Conference attendees were also given marketing t-shirts and were instructed on how to evade tax laws when filing their taxes and how to open bank accounts to evade legal attention. They were told to prove they were self-employed.

When using Venmo, I was advised not to use phrases like “sport,” “won this time,” and “can’t pick a winner” to avoid unwanted attention.

According to the indictment, one defendant told participants that Red44 “is not in the business of breaking kneecaps” to collect debts, but that they “made threats over the phone” to ensure they were paid. said he did it.

According to the indictment, at a bookmaker’s party in Trussville in December 2021, one person was seen counting a stack of two-inch $100 bills in the restroom of a restaurant, which he later found in his girlfriend’s wallet. was put in

Pughsley is charged with 38 counts of tax evasion, one count of complicity in operating an illegal sports betting scheme, one count of complicity in laundering money, and four counts of money laundering.

The following persons were also indicted:

• Chelsea’s Christopher Burdett, 30, has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting scheme, one count of attempted money laundering and one count of money laundering.
• Nathaniel Burdett, 36, of Birmingham has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting scheme, one count of attempted money laundering and two counts of money laundering.
• Jonathan Lind, 44, of Birmingham has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting scheme, one count of attempted money laundering and two counts of money laundering.
• Vestavia’s Thomas V. Zito, 57, has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting organization, one count of attempted money laundering, and one count of money laundering. .
• Christopher Donaldson, 46, of Trusville was charged with one count of conspiracy to operate an illegal sports betting organization and one count of conspiracy to launder money.
• Gary L. Rapp, Jr., 44, of Lakeland, Tennessee, has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting scheme, one count of conspiring to launder money, and money laundering.
• Mark Giaquinto, 50, of Upton, Massachusetts, has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting organization, one count of attempted money laundering, and two counts of money laundering.
• Matthew D. Voorhees, 47, of Inglewood, Colorado, has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting organization, one count of attempted money laundering, and two counts of money laundering. I was.
• David Richards, 38, of Las Vegas, Nevada, has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting scheme, one count of attempted money laundering, and two counts of money laundering.
• Joshua Gentrup, 36, of Athens, Georgia, has been charged with six counts of tax evasion, one count of conspiring to operate an illegal sports betting organization, one count of attempted money laundering, and two counts of money laundering. .