Four years after New York prosecutors began investigating Cantor Gaming for alleged criminal activity relating to its sportsbook affiliate operation, the company has agreed to pay out $22.5 million in settlements to several U.S. Attorney offices and regulatory agencies in various states.
Per the terms of the non-prosecution agreement, Cantor Gaming (now known as CG Technology) agreed to pay $16.5 million to settle investigations by U.S. Attorneys in Brooklyn and Nevada, along with $6 million to the Treasury Department’s Financial Crimes Enforcement Network.
Robert L. Capers, U.S. Attorney for the Eastern District of New York, issued a statement outlining his office’s position:
“Cantor Gaming quickly grew into one of the largest race and sports book operators in the United States. Unacceptably, this growth came at the expense of compliance with the law, and as a result Cantor Gaming became a place where at least two large-scale illegal bookmakers could launder their ill-gotten proceeds.”
As a result of the settlement, also referred to as “corporate probation,” Cantor Gaming cannot be criminally charged in relation to an ongoing criminal corruption case.
In October of 2012, when a 259-page indictment was unsealed by the Queens County District Attorney’s office in Queens, New York, Cantor Gaming’s Sportsbook Director Michael Colbert was named alongside 23 other co-defendants.
Colbert himself was charged with “enterprise corruption; fourth-, third-, and first-degree money laundering; and fifth-degree conspiracy.”
His various co-defendants – named in the indictment under aliases like “Tugs,” “Spanky,” and “Chinese Mike” – were faced with multiple counts of money laundering and promoting gambling.
According to the charges, Colbert was involved in an illicit gambling ring out of Queens and New Jersey run by a mob-connected outfit known as the “Jersey Boys.”
Prosecutors alleged that Colbert violated both federal law, and state statutes in Nevada, by allowing members of the Jersey Boys to place bets by proxy through legitimate sportsbook affiliates. Betting from outside Nevada via proxy, also known as “messenger betting,” is banned by state regulators.
Additional charges against Colbert alleged that he allowed certain customers to exceed standard betting limits, thus enabling underground bookies on the East Coast to launder illicit funds through Cantor Gaming affiliated sportsbooks in Nevada.
Colbert pleaded guilty to a charge of conspiring to take part in illegal gambling. He is currently awaiting sentencing, facing a maximum term of five-years imprisonment in federal custody.
Cantor Gaming was founded in 2004 by Lee Amaitis, who previously worked as second-in-command for financial services firm Cantor Fitzgerald. As a subsidiary of the financing behemoth, Cantor Gaming utilized the same advanced algorithms used to power high-speed trading on the stock market to generate live, or “in-play” betting lines for sportsbooks.
Among the major Cantor Gaming affiliates on the Las Vegas Strip were the Venetian, the Hard Rock Hotel and Casino, and the Cosmopolitan.
In 2014, after the Nevada Gaming Control Board issued a scathing 18-count complaint against Amaitis, alleging that he was at least partially culpable for Colbert’s malfeasance. Cantor Gaming agreed to pay the regulator a settlement fee of $5.5 million.
Amaitis retained his job, however, but earlier this year he was forced to resign his positions as President and CEO of Cantor Gaming as part of the most recent settlement agreement.