Thursday, 3 December 2020

After founder’s murder and $47M pact with the feds, widow seeks to license offshore sports-betting giant in N.J.

Q REPORTS – It has been two years since her flip-flop-wearing, math-whiz husband disappeared. “It feels like 20,” says sports-betting business-owner Laura Varela, a Costa Rican, from her home in San Jose, Costa Rica, reports The Philadelphia Inquirer.

Laura Varela, the Costa Rica woman who has agreed to pay US$47 million for peace with the U.S. government who had been pressing her husband and his Costa Rica-based, U.S.-focused sports betting company, 5Dimes

“It has been a year since authorities identified his remains, after a botched kidnapping, a million-dollar bitcoin ransom, and 12 arrests in two countries, leaving her to raise their two children alone. “I feel as if I am living my life through someone else,” adds Varela.

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And it was last month that the Costa Rican woman agreed to pay US$47 million for peace with the U.S. government agents and federal prosecutors in Philadelphia who had been pressing her husband and his Costa Rica-based, U.S.-focused sports betting company, 5Dimes, in a money-laundering and tax investigation.

“The Department of Justice understood. I felt their sympathy throughout this long process,” said Varela. “I am very, very happy and very excited the agreement reflects the fact that I was never involved in any of the wrongdoing.”

So now, with the help of gambling-industry lawyers in Philadelphia and Washington, Varela is trying to parlay her husband’s book of a million gamblers into a legal sports-betting company in New Jersey. Her lawyers are asking New Jersey to register the business there before moving into other states.

After its Atlantic City casinos lost business to new betting halls in Pennsylvania and elsewhere, New Jersey has become an early leader in U.S. online sports-betting, attracting larger wagers than rivals such as Nevada and Pennsylvania, which also welcomed pro and college football pools following favorable court rulings in recent years.

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William Sean Creighton was close to a guilty plea on tax, money laundering, illegal gambling and payment fraud charges when he was kidnapped, said Mike Lowe, of the department’s economic crimes unit.

After Creighton’s death, Justice settled with his widow, who forfeited his ill-gotten cash, gold, horses, cars, and baseball cards, but kept his betting book. The government agreed she hadn’t been part of the illegal business: “It opens the door for Ms. Varela to get licensed in the U.S.,” Carrillo concluded.

As part of the settlement with the government, she agreed to block U.S. access to 5Dimes’ websites and stop handling U.S. bets until the company is approved to do business in a U.S. state. She says she has retained the “core” of her husband’s 270 employees, who are still free under Costa Rica law to take bets from other countries, while her lawyers apply for a New Jersey license.

The late William Sean Creighton, known online as “5Dimes Tony,” moved to Costa Rica from his native West Virginia in the 1990s and built 5Dimes into one of the largest online, offshore sports-betting sites. Courtesy Laura Varela

Will New Jersey approve the application?

Her lawyers expect it will take several months to get an initial decision. If 5Dimes is approved, could it open the way for other offshore gambling operations with vast customer bases to follow? “The illegal business is certainly larger than the legal business,” says Chris Grove, partner at the Eilers & Krejcik gambling-business advisory firm in Irvine, Calif.

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Besides 5Dimes, major offshore sites include Bovada Sports and a handful of Costa Rica-based rivals, and Sportsbook.ag on the Caribbean island of Anguilla. Each of those firms handled at least US$2 billion in bets last year, according to Jeff Ifrah, a veteran casino lawyer representing Varela.

Can 5Dimes make the jump to legal status? “It’s a huge if,” said Michael Pollock, a former New Jersey Casino Control Commission spokesman who is managing director at Horsham-based consulting firm Spectrum Gaming Group. “That assumes they will be able to get licensed and take whatever steps the state deems necessary.”

Varela grows warm and expressive when asked about her husband. Creighton, son of a West Virginia supermarket owner, eschewed bodyguards and business formality, preferring to walk around San Jose in shorts with Varela, she said.

He could focus intently on anything from home decor to exploiting intricate bets by competing bookmakers. “He could see 20 miles down the line,” she said. “I could talk to him about anything.” He was such a helpful guide that she had to learn “to trust myself again and make decisions” after he vanished.

Creighton was persistent: “He was the best example I ever saw of ‘El que persevera, alcanza’ ” — the one who keeps at it, wins, added Varela, a Costa Rica native. That’s how he courted her, for two years, after she spent part of her senior year at the University of Costa Rica working at his neighboring company in the San Jose suburb of San Pedro. “I moved to the beach,” but he kept calling. They married in 2011 and had two children.

Creighton’s disappearance

He was alone in the summer of 2018 when, police say, two corrupt police officers waved his Porsche off the road. Kidnappers bundled him into a pickup and took him to an apartment arranged by local criminals. His wife paid US$1 million of the US$5 million in Bitcoins they demanded. The kidnappers took the money through Panama and Cuba, before police tracked the leader of the effort, Jordan Morales-Vega, a 25-year-old engineer, to Spain. That’s where he was arrested in January 2019 seven months before Creighton’s remains were finally found and identified in a Costa Rican cemetery. The complex case is approaching trial, Varela said.

Varela had known her husband was under investigation, said Stephen Miller, a lawyer at Philadelphia-based Cozen O’Connor who is representing Varela along with his law partner Barry Boss. “She hired us to engage the prosecutors and propose 5Dimes would go legitimate. Settle its liability with the federal government. Enter the regulated sports-betting market.”

Read the complete article at The Philadelphia Inquirer.

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Q Costa Rica
Reports by QCR staff

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