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LOS ANGELES (CNS) - Federal authorities today announced a series of cases stemming from an illegal Southern California-based gambling operation that involved current and former professional athletes, some of whom allegedly assisted with the business and others who placed large bets on games.
The principals of the operation agreed to plead guilty to conspiracy charges and admitted they took in millions of dollars in bets, many of which were facilitated by a Costa Rica-based gambling website, according to the U.S. Attorney's Office.
One of the leaders of the scheme also admitted that he failed to report to the IRS nearly $1.5 million in income he received from the gambling scheme over two years.
The owner of the online gambling business and website pleaded guilty earlier this month and admitted the business was illegal under California law because it involved at least five people, operated for at least six years, and often had gross revenue of well over $2,000 on a single day, federal prosecutors said.
Four new cases and related plea agreements were unsealed this week in Los Angeles federal court against:
-- Wayne Nix, 45, of Newport Coast, a former minor league baseball player, who was charged with one count of conspiring to operate an illegal sports gambling business, and one count of filing a false tax return
-- Edon Kagasoff, 44, of Lake Forest, Nix's longtime partner in the operation, who was charged with one count of conspiring to operate an illegal sports gambling business
-- Howard Miller, 63, of Gardena, who was charged with one count of aiding and abetting the operation of an illegal sports gambling business by assisting in the collection and payout of gambling proceeds related to the Costa Rica-based website
-- Celebrity Financial LLC, doing business as Sherman Oaks Check Cashing, which was charged with failing to maintain an adequate anti-money laundering program related to it cashing at least $18 million in checks from the illegal sport gambling business at its San Fernando Valley check cashing store.
Representatives of Celebrity Financial appeared in court on Monday. Nix made his first court appearance Wednesday and is scheduled to formally enter his guilty plea on April 11. Miller has agreed to appear in court Thursday afternoon, and Kagasoff has agreed to appear in court on Friday.
The Justice Department also announced that earlier this month the court unsealed cases against two other defendants:
-- Kenneth Arsenian, 52, of Newport Beach, who pleaded guilty on Jan. 26 to four charges: operating an illegal sports gambling business, filing a false tax return, money laundering, and accepting a financial instrument for unlawful internet gambling
-- Joseph Castelao, 56, of Rancho Palos Verdes, the owner of gambling website Sand Island Sports, who pleaded guilty on March 15 to operating an illegal gambling business.
According to the court documents made public this week, Nix began operating a bookmaking business about 20 years ago. Through his contacts in the sports world, Nix developed a client list that included current and former professional athletes, and he employed three former Major League Baseball players to assist with the business, according to federal prosecutors.
Nix's plea agreement outlines specific incidents related to the betting scheme, including receiving payments for gambling losses from a professional football player, a Major League Baseball coach and a baseball analyst. None was named or charged.
The plea agreement also discusses a bettor who wagered $1 million a year with Nix's operation, a $5 million bet on the 2019 Super Bowl and a sports broadcaster who told Nix he was going to refinance his home to pay off gambling debts. The bettor and sports broadcaster have also not been named or charged.
In its plea agreement, Sherman Oaks Check Cashing admitted that it encouraged customers to bring large business checks -- far in excess of the $10,000 that normally triggers a Currency Transaction Report to federal authorities -- and employees of the company told customers that it would not file CTRs, prosecutors said.