The U.S. District Court for the District of Columbia issued a consent order of forfeiture today ordering the civil forfeiture of $6,976,924 traced to international money laundering of the proceeds from an offshore Internet gambling operation that illegally targeted U.S. residents, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and Richard Weber, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI). The civil forfeiture action was resolved in connection with the criminal prosecution and recent conviction of William Paul Scott for violations of the Wire Act and money laundering statutes.
On Dec. 15, 2003, the U.S. government filed a civil forfeiture action against approximately $7 million held by Soulbury Limited, a shell company controlled by Scott and used to conceal the profits he gained through his illegal offshore Internet gambling operations. The government alleged that the $7 million held by Soulbury were proceeds of Wire Act violations and were subject to forfeiture as property involved in or traceable to money laundering transactions.
According to the civil forfeiture complaint, between 1997 and 2002, Scott and an associate operated World Wide Tele-Sports (WWTS), an Internet gambling operation located in Antigua. WWTS and related entities offered online sports betting services that had been heavily marketed to U.S. gamblers via the Internet and print and broadcast media. U.S. residents, who made up the vast majority of WWTS’s clientele, purchased “credit” for their Internet gambling accounts over the phone or online, and sent hundreds of millions of U.S. dollars out of the United States to WWTS’s offshore bank accounts. The U.S. gamblers then used these credits to place bets on popular professional and collegiate sporting events such as the Super Bowl and the National Collegiate Athletic Association’s men’s basketball tournament. Soliciting sports wagers over the Internet violates the Wire Act.
Based on the significant formal legal assistance provided by relevant authorities in the Bailiwick of Guernsey, the United States filed the civil forfeiture complaint against WWTS criminal proceeds physically located in Guernsey, but seized $6,976,924 from a correspondent bank account in the United States held by the Royal Bank of Scotland International (Guernsey). The seizure marked the United States’ first use of a legal provision that Congress designed to overcome situations that might prevent full cooperation in forfeiture matters even where both jurisdictions wish to completely fulfill their legal forfeiture assistance obligations under the applicable bilateral and UN assistance treaties (18 U.S.C. § 981(k).
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