Michael Colbert, pictured in 2010, a former Cantor Gaming executive, pleaded guilty in federal court in New York in 2013 for conspiracy to participate in an illegal gambling business.
Monday, Oct. 3, 2016 | 5:10 p.m.
Sports book operator CG Technology has admitted guilt and agreed to pay $16.5 million to avoid criminal prosecution on illegal gambling and money laundering charges, the U.S. Department of Justice announced today.
The agreement resolves a criminal investigation into allegations about the company, formerly known as Cantor Gaming, and Michael Colbert, its former director of risk management.
CG Technology is an affiliate of financial services company Cantor Fitzgerald LP. It operates eight Las Vegas race and sports books: the Venetian, the Palazzo, the M Resort, the Hard Rock, the Tropicana, the Cosmopolitan, the Palms and the Silverton.
In the agreement, the DOJ said CG Technology admits it broke the law by “accepting messenger betting, out-of-state betting and processing large amounts of monies which were the proceeds of illegal activities.”
“CG Technology acknowledged and accepted responsibility for aiding and abetting the operation of an illegal gambling business and money laundering from approximately 2009 through 2013,” the DOJ said.
The DOJ said that by admitting guilt, paying the penalties and making “far-reaching reforms to its business and compliance operations,” CG Technologies avoids criminal prosecution.
Colbert, who has yet to be sentenced, pleaded guilty to one felony count of conspiracy for his role in the schemes in New York federal court in 2013.
In the fall of 2012, more than $2.8 million in cash and casino chips was seized or secured in Las Vegas and 25 people arrested as part of the initial probe into the scheme, Nevada gaming officials said at the time.
The arrests netted eight people from the Las Vegas area, including Colbert.
The federal announcement today detailed the allegations Colbert faced when he was arrested four years ago:
“To accommodate some of the important bettors, Colbert and his staff facilitated violations of state and federal laws, including: knowingly accepting and facilitating “messenger betting” in its sports books on repeated occasions; knowingly accepting and facilitating out-of-state betting activity through wire communications; and processing large cash deposits and withdrawals and third-party wire transfers, knowing that the property involved represented the proceeds of some form of illegal activity.”
CG Technology also had run-ins with the law for other issues.
In late July, the Nevada Gaming Commission approved a $1.5 million settlement with CG over allegations concerning miscalculations by CG’s computerized betting system.
At the time, the commission said it would have revoked the company’s gaming license had the company not announced that its CEO Lee Amaitis would step down.
The commission said miscalculations by CG’s systems resulted in the underpaying of 20,000 winning bets by a total of $700,000 between August 2011 and March 2015.
As part of that settlement with the Nevada Gaming Commission over underpayment accusations, the company agreed to set up a $25,000 escrow account to pay out any remaining gamblers who were shorted.
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