Ever since the beginning of this country, gambling has been a staple pastime of many Americans. In fact, it is very likely that many Federal criminal defense attorneys, Assistant United States Attorneys, Federal agents and Federal judges all partake in legal gambling activities. From a fiscal perspective, gambling has been and continues to be used by governmental agencies to fund critical social programs such as childhood education, drug abuse, healthcare and many more. However, in an effort to maintain a monopoly on the industry, the Federal government has passed several laws to prevent private gambling. In recent years, the government has attempted to control internet-related gambling with addition measures and laws. There are now several tools in the Federal government’s arsenal to prosecute illegal and unlawful gambling of any nature.
- Federal Law Enforcement: From the FBI to the US Attorney & Their Respective Roles
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First, there is the Wire Act, Title 18, United States Code, Section 1084, which makes it illegal for anyone in the business of gambling to knowingly use the interstate wires (including the internet) to receive money or credit as a result of bets or wagers.
A violation of the Wire Act is punishable by up to 2 years in prison and fined up to $250,000.
Second, the government has frequently attempted to use the so-called “Travel Act,” Title 18, United States Code, Section 1952, to prosecute off-shore and other gambling businesses. For purposes of illegal gambling, the Travel Act simply states that anyone who travels in interstate or foreign commerce (which brings off-shore entities within its ambit) cannot (1) distribute the proceeds of any unlawful activity or (2) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment or carrying on, of any unlawful activity. The Act specifically includes in its definition of “unlawful activity” “any business enterprise involving gambling.” As such, the statute does not cover individuals who do not run a business of gambling. It also does not include the bettor, as he is not running a business enterprise involving gambling.
Typically, a violation of the Travel Act can result in a maximum sentence of five years in prison and a $250,000 fine.
- The Federal Court Process from Arrest to Potential Sentence
- Understanding the Federal Arrest Process: The Importance of Knowledgeable Counsel
- From Witness to Target: Potential Exposure & Consequences of a Federal Investigation
- Federal Sentencing Guidelines: Understanding Your Criminal Exposure
Third is Conducting an Illegal Gambling Business under Title 18, United States Code, Section 1955. As written, it precludes anyone from conducting, financing, managing, supervising, directing, or owning all or part of an illegal gambling business. One of the difficulties for the government in using this statute is that the “illegal gambling business” must be in violation of the law of the State where it is conducted. As written, this statute can only be used in “off-shore” Internet gambling operations if the bettor or some portion of the gambling operation is located a state that prohibits such conduct.
A violation can result in a sentence of up to five years in prison and a $250,000 fine.
Fourth, the government can attempt to prosecute illegal gambling through the Money Laundering statutes, Title 18, United States Code, Section 1956 and 1957. Anyone who conducts any financial transaction involving money from a specified unlawful activity (which includes gambling) with the intent to promote that activity or hide the true nature of the transaction is guilty of Money Laundering. As it relates to gambling offenses, the government usually alleges that any proceed of the illegal gambling activity “promoted” the carrying on of the gambling activity and was designed to hide the true nature of the transaction. Of course, there are many innocent reasons why people engage in certain financial transactions that are not criminal or suspicious. It is for that reason that you need an experienced criminal attorney who can help you navigate the complex laws, rules and regulations surrounding money laundering.
A violation of Money Laundering is punishable by up to 20 years in prison and a $500,000 fine, or twice the value of the property involved in the transaction, whichever is greater.
Fifth, are the so-called RICO statutes, Title 18, United States Code, Sections 1961 and 1962 which make it illegal to engage in a pattern of corrupt criminal behavior. Only violations of specific crimes qualify as “predicate” offenses for purposes of RICO; however, all of the gambling statutes mentioned here are such offenses. For an individual to be found guilty of a RICO offense the government must prove (1) that an enterprise affecting interstate or foreign commerce existed; (2) that the defendant participated in and was a member of the enterprise; and (3) that the defendant committed at least two racketeering (predicate) acts.
Typically, a RICO offense can be punished by up to 20 years in prison and a $250,000 fine.
- Federal Arrest Warrants: What it Means and Your Next Steps
- Understanding Federal Subpoenas: How the Government can Force You to Appear
- Understanding the Federal Bail Process
Sixth, is Tax Fraud, or tax evasion. Typically, money earned through gambling is not declared in Federal tax returns. As such, the government often attempts to prosecute the tax offense rather than the underlying allegation of gambling through the Tax Fraud statutes found in Title 26 of the United States Code. These prosecutions are not without their difficulties, as there are credible defenses and justifications that can be asserted by defendants. This is why it is critical to obtain qualified, experienced counsel to guide you through the criminal process.
Finally, in 2006, Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA), Title 31, United States Code, Section 5363, which makes it illegal for anyone engaged in the business of internet gambling to knowingly accept payment through the use of credit cards, electronic funds transfers, any check, or the proceeds of any other form of financial transaction.
A violation of the UIGEA is punishable by up to five years in prison.
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Whether you have received a subpoena or the FBI executed a search warrant. Whether you are a subject, target, or witness in a Federal Gambling investigation by Federal law enforcement, your livelihood, professional licenses and your freedom are all at stake. Quite simply, not involving a qualified Federal criminal defense attorney early in the process can have significant consequences. The Federal criminal lawyers and former prosecutors at Crotty Saland PC can help you identify and implement the proper defense given the allegations you face or a part of can, and often will, compound your legally fragile position. Protect yourself and your future. Contact Crotty Saland PC and let experience, knowledge and advocacy work for you.
Call the Federal criminal lawyers and former prosecutors at (212) 312-7129 or contact us online today.