KTLA News Filmed This Video of Cyrus Irani Being Arrested at His Home in Los Angeles.
Seventeen people were arrested in 3 U.S. states this week for their alleged role in an illegal gambling ring. A grand jury in New York City released indictments of 17 people, who were arrested in New York, California, and Nevada.
The gambling ring is thought to have include over 2,000 gamblers and tens of millions in illegal bets. The money was laundered through accounts with American banks, credit card companies, and overseas gambling websites.
Cyrus Irani Is the Ringleader
The organizer of the gambling operation is thought to be Cyrus Irani, aged 37, of Santa Clarita, California. Queens County District Attorney Richard A. Brown said the sports betting ring had a turnover of $32 million per year. Illegal operations often clear up to 20%, so the operators might have pocketed $6.4 million per year on the wagers.
In an interesting twist, the three men arrested in New York State all had backgrounds in the medical field. Michael Galoyan is described as a 32-year old podiatry resident. Johnson Matthew is described as a 31-year old respiratory therapist.
The third man, Jimmy Joseph, is a 31-year old imaging techician. Mr. Joseph even wore his medical scrubs in his courtroom appearance.
Prosecutor Richard Brown Discusses Gambling Ring
Richard Brown said Irani and his associates (referred to as “agents”) collected illegal bets on the most popular American sports, including NFL and NCAA football, NBA and NCAA basketball, MLB baseball, NHL hockey, and other sports.
The DA for Queens County said sports betting is “a multibillion-dollar, worldwide industry”. He equated the betting ring organized by Cyrus Irani to online gambling, because wagers were placed through online gaming sites. In a typical sports betting ring, the wager is made through a bookmaker or one of the bookie’s confederates, who then place the wagers in an offshore online sportsbook, in order to launder the money. This is different than the online gambling done directly at a poker room or casino site.
The prosecutor said, “Internet gambling has been compared by some to the crack cocaine epidemic of the late ’80s and early ’90s. It is highly addictive.”
The Size of Payments
Brown added that deposits in the sports betting ring ranged between $5,000 to $270,000, though efforts were made to hide the reason for the deposits. For instance, one set of bettors discussed buying a vintage Batman comic for $10,000.
Doug Madory of Dyn, an Internet analysis firm, said the gambling website (365action.com) in this case was registered in Panama. Though most of the betting takes place in offshore web addresses to avoid US authorities, the New York Times wrote last month that these types of operations often maintain a “secret digital presence” in the United States, so they can serve their customers better.
Mr. Madory said the Panamanian website had its service terminated back in July 2015. Since then, service has bounced around from site to site, with most of the Internet service providers located in the United States. At the time of the raids, San Francisco-based Nexusguard was providing service for the website.
Attempts to Fool Investigators
Perhaps as a form of deception, the 365action website said it “shall be considered originating and governed by the laws of Costa Rica.” Despite that crude attempt to look as if it was a Costa Rican-based site, the operation appeared to cater to Americans.
The site said on the homepage: “All wagers are in U.S. Dollars.”
When 365action’s customer service number was called, a woman asked the caller, “Are you a player or are you an agent?”
She was told that the caller was a New York Times reporter. In reply, the woman said, “In this case, I don’t have no one available who can help you with that issue.”
New York Times Reports on Panamanian Websites
The New York Times investigated the illegal online gambling industry and found that over 200 such websites are registered in Panama. Panama long has been a hub for offshore gaming operations. Sites which are registered and licensed in other countries are outside the jurisdiction of U.S. authorities.
Regulated or Unregulated Gaming Industry?
One of the reasons proponents give for legalizing sportsbooks is to undercut illegal operations. The reasoning is that Americans would play at legal, protected websites, if they were given the opportunity. Bans on gambling does not stop gamblers from engaging in their hobby; all it does is drive them underground.
It is estimated that over 95% of all sports betting in the United States is done through illegal bookmakers. Currently, only Las Vegas has legalized sportsbooks, though Montana, Oregon, and Delaware offer legal sports lottery betting. With so few legit options, most bettors go through an illegal bookie. ‘
