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US gambling site founder caught in Santo Domingo

BetOnSports gambling Web site founder Stephen Kaplan was arrested late on Wednesday in the Dominican Republic, a US federal prosecutor said.

US Attorney Catherine Hanaway is prosecuting a case against BetOnSports PLC in St. Louis, Missouri, federal court.

Kaplan is named in the 22-count criminal case as the company's top official. Hanaway said Kaplan was arrested at a hotel in Santo Domingo by the Dominican National Police, the US State Department and the FBI.

"This was a worldwide search and thanks to the assistance of many law enforcement agencies, this fugitive will soon be back in St. Louis to face the charges against him," Hanaway said in a statement.

BetOnSports chief executive David Carruthers remains under house arrest in a suburb of St. Louis.

He was arrested in July, shortly after Hanaway unsealed the criminal indictment against the London-based company, which is publicly traded.

The case has been closely watched by the online gambling industry, which generates about US$6 billion annually in the US.

A BetOnSports spokesman did not return a phone call seeking comment on Friday.

The indictment charges Carruthers and Kaplan with felony racketeering and fraud.

Law from the Sixties

The charges are filed using a 1960s law known as the Wire Act that prohibits placing bets on sports events over the phone.

Originally designed to crack down on mobsters, the law has become a tool for US prosecutors to charge offshore Internet gambling operations.

Hanaway's office and BetOnSports reached a settlement in November that permanently bars the company from accepting any bets from gamblers in the US.

While the settlement ended a civil case Hanaway filed against BetOnSports, it has no effect on the criminal case.

The federal indictment against Kaplan alleges that he founded an illegal gambling operation in New York in 1992.

After being caught, he moved his operation overseas and opened BetOnSports offices in Costa Rica between 1996 and 1997, according to the indictment.

In an interview last summer, Hanaway said that Kaplan and others in the online gambling business purposely structured their companies to make prosecution more difficult.
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