The former BETonSPORTS chief executive David Carruthers is likely to be released on $1m bail within days under a deal with the American government which would allow him to live in the Midwestern city of St Louis until his trial for organizing illegal gambling.
Mr. Carruthers was one of eight people connected to BETonSPORTS who appeared in Missouri's federal court yesterday to enter pleas of not guilty in relation to charges of fraud, racketeering and unlawful gaming.
Among the others caught up in America's crackdown on offshore betting were the brother and sister of Gary Kaplan, the man who founded BETonSPORTS and who is at the center of an international manhunt.
Mr. Carruthers is the only defendant still in custody and the 48-year-old British businessman's associates say he is not doing well. One said, "He looks like a beaten man — not physically beaten but just beaten down."
Wearing leg irons, a white T-shirt and loose beige slacks, Mr. Carruthers only spoke to confirm his name, age and plea. Lawyers are close to a deal allowing him out of custody on condition that he is electronically tagged and that he remain in St Louis.
Speaking outside the court, his lawyer, Tim Evans, said, "Right now, we want to get him out and living in clean sheets and clean clothes."
Mr. Carruthers was arrested while changing planes in Texas last month en route between Britain and BetonSports' operations in Costa Rica. The authorities in Missouri, where betting is only allowed on riverboats, say BETonSPORTS broke its laws by taking online wagers from American residents.
Following his arrest, he was fired by the company, although insiders say this was a legal technicality adopted by BETonSPORTS so that it could continue to insist that it had not received a contentious restraining order, which had been served on Mr. Carruthers, requiring it to repay cash to thousands of customers.
In a long list of arraignments, bail was granted to Lori Beth Kaplan Multz and Neil Kaplan — siblings of Gary Kaplan, who is accused of masterminding the BETonSPORTS gambling empire and is thought to be on the run either in Costa Rica or Israel.
It was a rare public appearance for the low-profile family. Ms Kaplan Multz, 35, a stout, curly haired woman in a white blouse and dark trousers, hurried out of the courthouse and into a taxi, ignoring reporters' questions about the whereabouts of her brother.
Her lawyer said she had given herself up voluntarily to the FBI in New York. Neil Kaplan, according to the department of justice, was arrested in Florida last month.
Others pleading not guilty were William Hernan Lenis, 52, William Luis Lenis, 26, Manny Lenis, 27 and Monica Lenis — all from Florida — who are accused of providing marketing support for BETonSPORTS and are on $1m bail, and Tim Brown, 36, who is alleged to be an executive at another of Gary Kaplan's gambling firms, Millennium Sports.
BETonSPORTS took more than $1bn in bets last year.
Court documents have disclosed details of the "sting" used to catch BETonSPORTS which initially focused on a promotional van used by the company.
In October 2002, the BETonSPORTS van was spotted in a car park outside the St Louis Rams American football stadium. When undercover officers visited, they were encouraged to open a betting account. To get round the illegality of off-shore betting, they were told to pay through a Western Union money transfer to a third party in either Belize or Ecuador who would place the bet on their behalf.
An affidavit filed in court says specialists traced similar Western Union transfers back to 18 gamblers who sent $2.5m over a three-year period, including $40,000 sent by two Missouri residents.
Other evidence includes BETonSPORTS radio commercials in which the company described itself as "legal and licensed" — which was misleading, according to the authorities, because it was not licensed in the US.
The US government has seized marketing materials sent to an address in a St Louis suburb which, prosecutors say, constitutes solicitation for illegal betting.
In a further blow to BETonSPORTS' reputation, it emerged over the weekend that the firm once shared offices with a company linked to the Bonanno family, notorious New Yorkers associated with the mafia.