US Attorney Prim F. Escalona announced the unsealing of a federal grand jury indictment charging eleven people with illegal US sports betting and tax evasion crimes.
According to a press release, the 114 court indictment filed in US District Court charges the defendants for managing a multi-million dollar wagering excise tax evasion scheme involving an illegal sports betting organization.
What happened in the illegal US sports betting scheme?
According to the indictment, Timothy J. Pughsley, 51, of Birmingham, Alabama, began an illegal bookmaking business roughly 17 years ago. Pughsley’s organization, better known as “Red44,” handled illegal online sports betting via an offshore server in Costa Rica.
From 2019 through 2021, officials estimate Red44 accepted hundreds of millions of dollars from bettors.
Back taxes owed to the IRS is over $19 million
In 2019, the organization was alleged to have earned a gross profit of $14,930,787. In 2020, the organization had an income of $24 million and in 2021 an income of $36 million.
The excise tax owed to the Internal Revenue Service (IRS) for each year would be:
- 2019 – $6.8 million
- 2020 – $6 million
- 2021 – $7 million
The excise tax owed to the IRS is two percent of total bets placed by bettors. Assistant United States Attorneys Catherine Crosby, Kristen Osborne, and Ryan Rummage are prosecuting the case.
The eleven individuals charged in the case are:
- Timothy J. Pughsley, 51, of Birmingham, Alabama (38 counts of tax evasion, 1 count of illegal sports betting, 1 count of conspiring to commit money laundering, 4 counts of money laundering.)
- Christopher Burdette, 30, of Chelsea, Alabama (8 total counts)
- Nathanael Burdette, 36, of Birmingham, Alabama (10 total counts)
- Jonathan Lind, 44, of Birmingham, Alabama (10 total counts)
- Thomas V. Zito, 57, of Vestavia, Alabama (9 total counts)
- Christopher Donaldson, 46, of Trussville, Alabama (2 total counts)
- Gary L. Rapp, Jr., 44, of Lakeland, Tennessee (10 total counts)
- Mark Giaquinto, 50, of Upton, Massachusetts (10 total counts)
- Matthew D. Voorhees, 47, of Englewood, Colorado (10 total counts)
- David Richards, 38, of Las Vegas, Nevada (10 total counts)
- Joshua Gentrup, 36, of Athens, Georgia (10 total counts)
All defendants named are alleged senior agents in the Red44 organization or original founding members.