Six people were charged yesterday in what authorities say is a massive gambling network that grossed millions of dollars a year in Northeast Ohio.
A federal grand jury indicted reputed East Side numbers kingpin Virgil Ogletree, 81, of Beachwood, and his longtime friends and associates Eunice Bonton, Melvin Murray, Noah Hutchinson Sr., Andrew Freeman and Mary Stover. All are charged with running an illegal gambling business, while Ogletree, Hutchinson and Bonton also are charged with tax violations.
Authorities said they are accused of accepting hundreds of bets a day from bet-takers known as numbers runners in Cleveland and operating an illegal lottery based on the Ohio Lottery's daily Pick 3 game.
The illicit games' attraction to gamblers is the payoff.
Ogletree's operation used the same winning numbers as the Lottery's Pick 3, but those who won with Ogletree and the others would receive as much as $750 for a straight $1 bet, compared to $500 from the Lottery, investigators said. They also said Ogletree accepted credit, which the Lottery doesn't. And winners in the illegal lottery can easily dodge taxes.
In the past, Ogletree has claimed that the Internal Revenue Service has hounded him. He has been convicted of gambling-related tax evasion, and the IRS put back-taxes liens on tens of thousands of dollars worth of his possessions and raided his home and businesses. Ogletree's attorney, John McCaffrey, said yesterday that he "intends to vigorously defend against the allegations in the indictment."
In court documents, the IRS said the group was aided by several associates who hedged bets, accepted wagers and collected debts. Two years ago, the agency estimated in court filings that the game earned about $10 million a year, but authorities would not disclose the amount yesterday.
The charges end a four-year investigation by the IRS and FBI that focused on illegal lotteries in Cleveland. Two years ago, agents seized 18 fax machines, $115,000 and boxloads of records that were said to link runners to Ogletree, Bonton and Stover.
Stover, according to court records, took Ogletree's "layoff" bets through her business at the Tune Palace, which sells Ohio Lottery tickets. Layoffs - in which bookmakers go to another bookie and play the same numbers that are popular with their bettors - hedge against big losses.
Stover was convicted in 1993 of federal gambling charges linked to a numbers operation controlled by associates of the Pittsburgh Mafia family. Her attorney, Richard Lillie, could not be reached to comment.
The numbers rackets have been huge in Cleveland since the 1930s. At first, the games were based on a combination of figures from the daily close of the New York Stock Exchange. In the 1970s, the games began mimicking the numbers from the Ohio Lottery.
A sworn statement in federal court from IRS Agent Thomas Himes states that employees of Ogletree and Hutchinson received scores of calls each night just between 6:30 and 7:20 p.m., just before the Lottery's evening drawing. They also took in hundreds of bets right before the Ohio Lottery's first drawing of the day at 12:30 p.m.
Ogletree wanted computers to sort out the information because bets were coming in so quickly, according to the affidavit. But on Sundays, when the Ohio Lottery game isn't played, the phone lines were hardly touched, the record shows.
The indictment claims that Ogletree worked with Stover and Murray, a 78-year-old Cleveland man, to run his business. Murray has known Ogletree for years, and he was in charge of finances for Ogletree's business, according to court records.
A second indictment claims that Hutchinson, a convicted cocaine dealer, worked with Bonton, Stover and a Cleveland man named Andrew Freeman in running a separate illegitimate lottery business. Though the businesses were separate, they often worked together, authorities said.
Murray and Freeman could not be reached. Bonton and Hutchinson had no comment.
Assistant U.S. Attorney Bernard Smith declined to discuss the case.