New York’s rings bets were handled here, DA says  

Local Web hosting firm figures in big bookie bust

An anti-gambling prosecutor in New York has gained a criminal indictment against a Costa Rica Web hosting firm as part of a $3 billion bookmaking sweep.

The company is Digital Solutions S.A. of Sabana Sur, and it is one of three corporate defendants in an indictment made public Wednesday in Queens, New York. Also indicted were 27 individuals who are accused of running a gambling ring in the United States.

Queens District Attorney Richard A. Brown said this is the first time that a web designer and an offshore based Internet company have been charged with directly participating in a criminal enterprise. The bookmaking ring accepted more than $3.3 billion in wagers over a 28-month period on a wide variety of sporting events, Brown said.

Digital Solutions is listed as being on the Fifth Floor of the La Colmena building five blocks west of the Contraloria de la República in Sabana Sur. The company provides software to the gambling industry and also provides Web hosting services. A previous address was in Office Centro La Sabana. The firm on its Web site says it was founded in 1997.

The 33-count indictment filed in Queens County Supreme Court charges that the gambling ring promoted illegal sports betting in Queens County and elsewhere and that the defendants were involved with gambling wire rooms in both Miami and overseas. Some 20 of the defendants are also being sued civilly and have been named as respondents in a historic $500 million civil forfeiture action filed in Queens Supreme Court by the District Attorney’s Special Proceedings Bureau, which alleges that they engaged in a criminal enterprise that promoted illegal gambling activities and generated illegal wages.

Digital Solutions S.A., doing business as D.S. Networks, S.A., Inc. also is among the civil defendants.

The firm used the Web site Playwithal.com, which was accessible both online and via an “800″ toll-free telephone number. Although the Web site was maintained in Tampa, Florida, its web servers and wire room terminal were situated outside the United States - on St. Maarten in the Caribbean or, more recently, in Costa Rica, the District Attorney’s Office said. The Web site no longer is active.

Brown, the district attorney, has made arrests of gamblers with Costa Rican connections in the past. And the U.S. federal government has arrested a Costa Rican sportsbook executive who happened to pass through the United States. However, this is the first time the technical infrastructure of a gambling operation figured in an indictment.

From the indictment it appears that all bets originated in the United States.

“The defendants are accused of running a tightly knit and an incredibly lucrative - and illegal - global gambling operation, ” said the district attorney. “It is alleged that they were as savvy and adept in the use of computer technology as they were proficient in the art of secreting and laundering untold millions of dollars in unlawfully earned proceeds through casinos, shell corporations and bank accounts in a variety of locations around the globe, including Central America, the Caribbean, Switzerland, Hong Kong and elsewhere. So massive was the enterprise that only with the assistance of federal law enforcement, police authorities in sister states and other nations have we been able to bring these defendants to justice.”

District Attorney Brown said that the investigation leading to Wednesday’s indictment began in July 2004 when New York Police Department officers assigned to the Queens Major Case Squad and the Queens Narcotics District developed information about an illegal betting ring and began a joint investigation with the District Attorney’s Organized Crime and Rackets Bureau. The investigation included physical surveillance, intelligence information and court-authorized electronic eavesdropping on nearly 30 different telephones and intercepted tens of thousands of conversations. According to the indictment, detectives were able to crack the passwords of key individuals in the gambling ring and follow their day-to-day activities online.

The indictment alleges that the ring used a non-traditional wire room in the form of the offshore, Internet-based gambling service used by bettors and runners to actually place their wagers.

It is alleged that the ring used the offshore wire room to maintain the gambling accounts of numerous runners and bettors through the Internet Web site in an effort to evade law enforcement detection.

Law enforcement crackdowns on traditional mob-run wire rooms have led to the use by illegal gambling rings of off-shore gambling Web sites where action is available around the clock, said officials. Bettors could click on an offshore gambling Web site over the Internet and be assigned individual login codes and passwords. Their wagers and win-loss amounts are recorded in sub-accounts maintained in the accounts of runners and agents. These gambling Web sites typically store their information on computer servers outside the United States - such as in Costa Rica - and “bounce” their data through a series of server nodes in an effort to evade law enforcement, said the District Attorney’s Office.

In carrying out the alleged conspiracy, it is charged that Primary Development, Inc., and its chief executive officer, Maurice Freeman, developed the sports betting Web site www.playwithal.com specifically tailored to meet the needs of James W. Giordano and his son-in-law, Daniel B. Clarin. The Web site - which is literally a computerized betting sheet - is known as “Playwithal Sportsbook.”

In furtherance of the alleged conspiracy, Prolexic Technologies, Inc., allegedly provided security of Playwithal’s Web servers by screening bettors’ Internet protocol addresses to search for viruses or tracking programs that could be used to hack into Playwithal’s servers. Digital Solutions lists Prolexic as a partner. Prolexic has programs to keep hackers out of computer systems.

The indictment charges that Giordano was the bookmaker and boss of the enterprise who controlled and oversaw the entire operation. The indictment further charges that Clarin worked as the controller and was responsible for managing the day-to-day operations and handling bettor disputes and accounting discrepancies, as well as managing account information of the various runners and bettors.

In addition to the criminal charges, a number of search warrants were executed which resulted in the seizure of gambling records, computers and hundreds of millions of dollars in real and personal property, including four Manhattan condos, millions of dollars in cash, tens of thousands of dollars worth of casino chips from the Bellagio in Las Vegas, Nevada,, a rare art collection, jewelry, gold coins, and a football signed by the 1969 championship New York Jets following their victory in Super Bowl III.

The individual ownership of Digital Solutions could not be determined Wednesday night. However, it is among a number of firms here that provide Internet server and wireroom services to bookmakers elsewhere. They have advertised their services in English-language print newspapers.

Still uncertain is what the Queens District Attorney’s Office can do to serve the indictment here because gambling is not a crime in Costa Rica. However, the U.S. government and state officials such as Brown consider that taking a bet from the United States is a crime even if the bookmaker is offshore.

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