BetonSports Cited for Contempt of Court in US Gambling Case

U.S. District Judge Carol Jackson found the sportsbetting gambling company BetOnSports in contempt of court for failing to appear in St. Louis District Court to answer charges of racketeering and violating interstate gambling laws, Bloomberg news service reported.

BetOnSports was found in contempt after instructing their St. Louis counsel, Jeffrey Demerath, not to appear at their hearing.

Judge Jackson said, "I clearly believe Betonsports' actions are contumacious and disregard the court's order without any excuse." Prosecutors have asked Jackson to impose daily fines upon the company's officers until an officer of the company appears in court.

The London-based company was indicted last summer, together with its founder Gary Kaplan, then-Chief Executive Officer David Carruthers and nine other individual defendants. Prosecutors are seeking the forfeiture of US$4.5 billion (about 2.28 GBPounds, or 3.46 billion Euros).

Carruthers and six other defendants appeared in court on July 31 and entered not guilty pleas. Kaplan and two other defendants are still at large. A not guilty plea was entered on the company's behalf on Jan. 11.

In November, Demerath was one of two corporate attorneys who signed a civil consent agreement with federal prosecutors paving the way for Judge Jackson to issue an order permanently banning Betonsports from doing business in the United States.

On the eve of the company's scheduled arraignment on the criminal charges last month, Demerath told the court his clients had instructed him not to answer the charges.

Betonsports' decision "suggests that corporate management is neither in a coma nor dead but, instead, contemptuous and defiant," Assistant U.S. Attorney Michael Fagan said in court papers asking Jackson to make the contempt finding.

"The defendant is the company,"' former Assistant U.S. Attorney James Montana said in a telephone interview with Bloomberg news from his office in Chicago. "It would be appropriate for the company to be fined," he said.

When fining a company in this manner, the question becomes who pays the fines. Individuals not named specifically in the suit, such as directors or officers of the company, would typically be exempt from those fines.

If the company does become banned from doing business in the US on orders from Judge Jackson, the company may see no reason to pay those fines, and instead let the fines be levied and converted into judgements or liens against any property held in the US by the company.

Demerath reportedly has not received a contempt order and has not commented on the proceedings at this point.

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