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“Such unlawfully earned profits are often and easily diverted to more insidious criminal enterprises. In fact, the investigation uncovered evidence that the enterprise had links to both the Gambino and Genovese crime families,” Queens District Attorney Richard Brown said, alleging that the network averaged nearly $20 million per month in proceeds.
According to prosecutors, the group accepted wagers on a wide variety of sporting events — ranging from professional football, basketball, hockey and baseball to various collegiate sports.
The gambling ring promoted illegal sports betting in Queens using various Internet websites and toll-free telephone numbers to accept wagers. They allegedly controlled an off-shore wire room — located in Panama — to maintain gambling accounts of local affiliates and numerous bettors through the ring’s websites in an effort to evade detection.
Local members of the ring allegedly used data compiled at the Panama site to collect and distribute money within their area.
According to law enforcement officials, gambling websites typically store their information on computer servers located outside the U.S. and bounce data through a series of servers to conceal its source.
One of the ring’s alleged leaders, Joseph Fafone, 48, was arrested Tuesday at an airport in Rochester, where he was waiting to board a flight to Panama.Fafone was carrying nearly $24,000 at the time of his arrest.
Fafone’s company, JJF Consulting Services, Inc., operated out of his home in upstate Farmington, was allegedly a shell corporation used as a money laundering front — funneling and obscuring the ring’s illegal gambling proceeds.
Fafone and his partner, Eric Harp, 36, allegedly acted as bookmakers for the gambling network, overseeing the entire operation. The pair allegedly enlisted dozens of agents acting as managers, collectors, distributors and recruiters.
Money collectors and distributors were responsible for exchanging, delivering and transferring gambling proceeds between members of the organization, according to prosecutors.Some of the collectors were also involved in exchanging, distributing, delivering and transferring gambling proceeds through various financial institutions. Runners were responsible for soliciting new clients and maintaining existing relationships by meeting with bettors to collect losses or pay winnings.
The arrests came after a 38-month joint investigation by the NYPD and IRS.
“Gambling proceeds are the fuel that drives organized crime. The staggering amount of money in this case demonstrates just that. In this instance, however, the bookies ran out of luck,” Police Commissioner Ray Kelly said.
If convicted, the alleged ring members each face up to 25 years in prison.In addition to criminal charges, 20 of the alleged members were named in a $125 million civil lawsuit.
