QUEENS---Seventeen individuals, including former and current government workers, have been indicted on charges of unlawfully operating an online gambling operation that operated mainly out of a Long Island City strip club and a Jackson Heights restaurant, annually booking more than $30 million in wagers on a wide variety of sporting events ranging from horse-racing, football, baseball, basketball and hockey to NASCAR, PGA golf and professional tennis.

District attorney Richard Brown said that the defendants include two former NYPD officers, a city sanitation worker, a U.S. Postal employee who allegedly ran bets for his bosses, and a stock broker. He said they are accused of running an old-fashioned bookmaking operation, complete with runners who accepted illegal wagers and called in the wagers to distributors and the bookmaker himself who settled up their win-lost figures for the day or week.

A 16-count enterprise corruption indictment was unsealed Thursday in Queens County Supreme Court charging that the gambling ring promoted illegal sports betting in Queens County and elsewhere and that the defendants were involved with a gambling wire room in Costa Rica that they accessed through an "800" toll-free phone number or online through the Internet website, www.50ksports.com.

Brown said that the investigation leading to the indictment began in January 2006 when New York State Police 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 six different telephones and a computer that intercepted nearly 50,000 conversations.

According to the indictment, between May 1, 2006, and March 22, 2007, the 17 defendants conspired to acquire money illegally through the operation of an unlawful gambling enterprise involving the use of an Internet website. The indictment also alleges that the ring used a non-traditional "wire room" in the form of an off-shore, Internet-based gambling service used by runners to actually place the wagers. It is alleged that the ring used the off-shore wire room to maintain the gambling accounts of numerous runners and bettors through the Internet website in an effort to evade law enforcement detection through traditional methods.

According to the district attorney, law enforcement crackdowns on traditional mob-run wire rooms have led to the use by illegal gambling rings of off-shore gambling websites where action is available around the clock. Bettors can click on an off-shore gambling website 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 websites 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.

The indictment charges that John Kinahan, a former NYPD police officer and presently a manager at City Scapes, a topless dancing club on Queens Plaza in Long Island City, was the "bookmaker" and boss of the enterprise who controlled and oversaw the entire operation. According to the indictment, Kinahan's wife, Virginia Kinahan, a secretary at the law firm of King & Spaulding and the listed owner of City Scapes, worked as the "bookkeeper" and was responsible for managing the dayto- day operations and handling bettor disputes and accounting discrepancies, as well as managing account information of the various runners and bettors.

The indictment further alleges that John Morrissey, who owns the restaurant Legends in Jackson Heights, and Philip Buckles, a former NYPD detective in the Organized Crime Investigation Division, worked as "distributors" who were, in effect, "super-agents/super runners" as each distributor had several subordinate agents/runners reporting directly to them.

It is alleged that 13 defendants including U.S. Postal worker Glenn Mulhern who allegedly placed bets for his superiors at a Long Island City post office, NYC Sanitation worker (and the Kinahans' nephew) Jeremiah Keating, Merrill Lynch stock broker Timothy O'Connell, Stephen DeFranco, Angelo Neos, Craig Sullivan, Leo Stern, Wai Kong, Peter Song, Andrew Lamparter, Steve Nicolopoulos, Salvatore Vagloca and Donald Ericksen - worked as "agents/runners" and were responsible for soliciting new bettors to the organization, maintaining existing bettor relationships and meeting with bettors to collect gambling losses and payout winnings.

According to the indictment, a bettor would place a bet with an agent/runner, who would place the bet either through the website or through one of the organization's toll-free telephone numbers. Afterwards, the bettor collected his winnings or paid any losses by typically meeting with an agent/runner in person. The agent/runner, in turn, met with a distributor or the bookmaker to turn over any gambling debts the agent/runner collected from his bettors and/or to receive any money from the distributors or bookmaker that the agent/runner's bettors won.

The bookmaker, financial officers, accountant and other members of the organization then allegedly conducted various financial transactions with the gambling proceeds to, in part, conceal or disguise the nature, location, source or control of the gambling proceeds or to avoid any transaction reporting requirement imposed by law. 3-29-07

© 2007 North Country Gazette