No more wagers from US bettors
Popular Costa Rica-based sportsbook 5Dimes has agreed to a $46.8m settlement with the US government, following a money-laundering investigation by the feds.
5Dimes consented on Wednesday to forfeit over $30m in assets, pay $15m in cash, and stop taking wagers from US bettors while operating out of Costa Rica – this according to a settlement agreement between 5Dimes and the US Attorney’s Office for the Eastern District of Pennsylvania (EDPA), ESPN reports.
Assistant US attorney for the EDPA Michael Lowe said of the investigation’s success: “There was gambling going on, but we discovered it, we put a stop to it.”
now free to pursue opportunities in the rapidly expanding US gambling market”
As part of the settlement, Laura Varela, widow of sportsbook owner William Sean ‘Tony’ Creighton, known as ‘5Dimes Tony’, was absolved of any criminal conduct alleged against 5Dimes. The company has announced it is now free to pursue opportunities in the rapidly expanding US gambling market:
Varela, via her attorneys, contacted the EDPA early 2019 and offered to cooperate with the criminal investigation. Her cooperation did not extend to disclosing information on or the identities of any customers. She undertook responsibility for 5Dimes’ assets following Creighton’s kidnapping in 2018. The settlement maintains that the widow did not have “day-to-day authority” over the sportsbook’s operations.
Federal money-laundering investigation
Prior to Creighton’s kidnapping and murder discovery, both he and 5Dimes were under federal investigation. A seizure warrant filed in the US District Court in 2016 states that the EDPA, in conjunction with the Department of Homeland Security, disclosed it was investigating the sportsbook for money laundering.
The warrant detailed an agent’s belief that 5Dimes instructed US-based bettors to use gift cards in order to place – and later cash out – their wagers. While Creighton was never formally charged, the investigation remained open for a number of years.
According to Wednesday’s settlement, the EDPA said 5Dimes received illegal US betting payments via third-party payment processors. The latter would then process credit card transactions on behalf of the sportsbook while hiding the nature of the charges. Funds would subsequently be wired to bank accounts of shell companies operated by Creighton, the settlement outlines.
September 8 exit announcement related
News of the investigation makes clear the somewhat cryptic reason given by 5Dimes on September 8, 2020 as to why it was exiting the US market.
5Dimes explained to customers at the time that its US service would be temporarily suspended “so that we can launch our new operations with a fresh start.” The sportsbook instructed customers to suspend their accounts and withdraw their balances by September 25, 2020.
In a statement following the settlement, 5Dimes described the decision to suspend wagering for US customers as “a direct result” of the EDPA settlement agreement, saying it was “out of our control”.
Route to US market opens up
With an eye to the US sports betting market, 5Dimes has already set up a new corporate entity, 5D Americas LLC, in Delaware. Varela stated that the recent settlement offered a clean slate for both herself and the brand, adding that it represented a significant event in the legalization of US sports gambling.
his spirit will be able to live on”
“My husband’s death was tragic, but he loved 5Dimes and all of its loyal customers. Now his spirit will be able to live on as the 5Dimes brand begins this new chapter,” she added.
US attorney for the EDPA, Maria M. Carrillo, told ESPN while Varela was now compliant with US federal law, “whether she’s positioned well for regulators, that’s up for the regulators to decide.”
One of Varela’s attorneys, Stephen A. Miller, said she offered US regulators a “tremendous opportunity” as the head of a popular brand that voluntarily approached prosecutors with the intention of becoming compliant with US law. He also warned: “If the regulators refuse to license [Varela], then no other offshore sportsbook will even bother to try to clean up its act and follow her lead.”