DME Global Marketing & Fulfillment, Direct Mail Expertise and Mobile Promotions and four of its principals -- William Hernon Lenis; his son William Luis Lenis and daughter Monica Lenis; and Manny Gustavo Lenis, a nephew -- were named in an indictment unsealed yesterday accusing BetOnSports and its principals of illegally engaging in internet gambling and tax evasion.
The indictment, issued in St. Louis, charges the ad execs and their companies with engaging in a racketeering conspiracy, saying they worked to illegally advertise and support several websites by buying ads, sending equipment and prizes for the site to Costa Rica and eventually serving as the fulfillment house for internet-gambling prizes.
Among examples of the support given in the indictment: a $99,620 check sent Sept. 6, 2000, to American Media Communications for advertising and the shipment of two cars from the U.S. to Costa Rica.
The indictment says the conspiracy was intended "to develop a scheme to defraud gamblers in the United States by inviting, inducing and persuading them to place bets ... As part of the scheme the members and associates [involved] created and disseminated advertising through the United States which falsely stated that internet gambling on sporting events and contests was 'legal and licensed.' The enterprise used radio and television to deliver fraudulent advertising through broadcasts and cablecasts in and across the United States."
Biggest attempt yet
The BetOnSports case is the biggest attempt yet by the government to take action on online gambling. Some proponents of internet gaming have suggested it is legal for U.S. citizens to bet using internet sites headquartered overseas and almost impossible to stop, but the Justice Department and Congress have tried, imposing limits on credit card use at the gambling sites.
The founder of BetOnSports.com, Gary Stephen Kaplan, 47, was charged with 20 felony violations and the Justice Department also sought a temporary restraining order to bar the website from continuing to operate in the U.S.
BetOnSports is now part of a British corporation, BetOnSport PLC. The CEO of that company, David Carruthers, has also been charged.
All four ad executives were charged with conspiracy and could face up to 20 years in prison and have to pay a share of billions of dollars if convicted. In addition, William Hernan Lenis, Monica Lenis and Mobile Promotions have been charged with interstate transportation of gambling paraphernalia and could face 5 years in prison and fines of up to $250,000 each.
Officials of the ad agencies and a lawyer associated with them could not be reached for comment. According to websites for the ad agencies, the shops have produced promotional blow-up masks for major marketers including McDonald's and Anheuser-Busch.