5Dimes, an offershore betting site that has illegally accepted US bettors for years, has reached a $46.8 million settlement deal with the United States to investigate illegal US sports betting operations. The investigation will also include money laundering and wire fraud.
The Costa Rica-based company revealed its intent to enter the US sports betting market following the settlement. However, the company’s bid will be met by the reluctant state regulators due to its shady past.
5D Holdings will forfeit the gambling proceeds the company obtained illegally as a part of a settlement with the US authorities into the criminal probe of its offshore operations in Costa Rica.
It began in 2011 when 5Dimes began to accept wagers from and made payouts to US bettors. It transferred more than $46.8 million in proceeds drew from its illegal gambling activities in complete secrecy. It sought to hide the nature, source, location, and control of the funds.
Meanwhile, 5Dimes incorporated 5D Americas LLC in Delaware. The deal allows the owner Laura Varela the “use of her assets or the assets of the brand to explore future options.” The alternatives will include, but not limited to, reconstituting the 5Dimes brand to be licensed to launch legal, regulated gaming activities in the US and elsewhere.
Why is 5Dimes Settling This Deal With The US?
Varela is a Costa Rican citizen and a widow of Sean “Tony” Creighton. Her late husband was found dead in Costa Rica after he was kidnapped and eventually murdered in September 2018.
The company’s activities were bound to be exposed as the illegally earned $46.8 million could be trailed. The act was in violation of the sections of Title 18 of the US code.
The settlement stipulates that 5Dimes “acknowledged that those funds are the proceeds of multiple unlawful gambling-related offenses, including wire fraud, money laundering, illegal transmission of gambling information.”
Not all cash
According to the settlement, $46.8 million was not completely liquid, as Creighton sought to launder the funds in various ways.
Overall, the assets forfeited amounted to more than $26 million. Varela consented to pay an additional $15 million, besides forfeiting $2 million seized by Costa Rica.
Offshore Betting Seen as Illegal by US Authorities
The settlement issue has struck a blow to those supporting the legality of the offshore gambling industry within the US. The US government began investigating 5Dimes’ illegal acceptance of US-based wagering years ago. It also imposed a huge fine for the company to avoid charges.
The company seems to bear the losses as its bid to white-clean its illegal past before seeking state-level licensure.
However, the 5Dimes’ admission of US law violations will reinforce the significance of legal gambling in the country.
What’s Next for 5Dimes?
While speaking to the Wall Street Journal about the future plan, Verala’s attorney Jeff Ifrah said, “the next step, we will be trying to get 5Dimes licensed in New Jersey.”
Throughout the process, Varela will have the support of the US Attorney’s Office. It will “answer inquiries made by gambling regulators, investors, and financial institutions regarding her cooperation in the investigation…,” according to the settlement agreement.
It simply means whether the 5Dimes owner gives it a go with the company or decides to sell, she’s be supported by the authorities she aided throughout the probe.
Yet, it will be interesting to see how gaming regulators will treat 5Dimes, which until very recently was taking wagers from the Americans illegally.