FORMER ONLINE GAMBLING EXEC MAKES BAIL

16 August 2006

BusinessWeek.com
The Associated Press/ST. LOUIS
By CHRISTOPHER LEONARD
AP Business Writer

AUG. 16 3:17 P.M. ET Former online gambling executive David Carruthers was freed on a $1 million bond Wednesday after spending nearly a month behind bars following his arrest on racketeering and fraud charges.

Carruthers, 48, was freed after a hearing before U.S. District Judge Mary Ann Medler. He had been expected to be released as early as Monday but it took days to work out technical details. Among those details: A dedicated phone line had to be installed at the residence where he will stay.

The charges against Carters are part of a 22-count indictment against London-based BetOnSports PLC being prosecuted by U.S. Attorney Catherine Hanaway in St. Louis. Carruthers was chief executive of the company until shortly after his arrest, when he was fired.

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The case is one of the largest U.S. prosecutions of an online gambling company and has caused BetOnSports to close all of its U.S.-focused operations. It has caught the attention of the online gambling industry.

Early Wednesday morning, Carruthers entered Medler’s courtroom in leg irons and handcuffs, escorted by a security guard. Carruthers sat alone at a table and declined to speak with The Associated Press.

Carruthers, a British citizen, will live under house arrest in the St. Louis area until his trial on fraud and racketeering charges. The first hearing in the trial is scheduled for Aug. 21.

According to the terms of his bond, Carruthers will live in an upscale hotel in the suburb of Clayton. He will not be allowed to leave the hotel except for court appearances, meetings with his attorney or medical emergencies. Carruthers will wear an ankle bracelet to monitor his whereabouts.

During the hearing, Carruthers asked the judge only one question: “The house incarceration: Is that 24 hours a day?”

Medler told him it was. Federal officials overseeing Carruthers’ bond wouldn’t say whether he will be forced to stay in his room, or have access to the entire hotel. Carruthers’ attorney Scott Rosenblum said his client is not a flight risk.

“He’s looking forward to responding to these charges in court,” Rosenblum said. He said he’s happy Carruthers will be out on bond.

“Certainly it will help in having access to Mr. Carruthers to defend him in court,” Rosenblum said.

Federal prosecutors insisted that none of Carruthers’ bond money come from the treasury of BetOnSports, Rosenblum said. He wouldn’t say how Carruthers came up with the full payment, but said all the money was raised through legal means.

Hanaway said she will continue to prosecute the case against BetOnSports regardless of the company’s decision to close its offices and stop accepting U.S.-based bets. She said the move does not absolve the company from taking illegal bets in the past.

This article can be found at BusinessWeek.com

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