Two more former operators of online gambling sites in Costa Rica have been sentenced to prison.
They are Dominic Buttitta, 69, and his son, Anthony, 43. The father got 18 months, and the son received 30 months in prison, according to the U.S. Attorney’s Office in Chicago.
The case was less about illegal gambling than what the U.S. government said was $4.6 million in unreported income.
They operated an adult entertainment club in Elgin, Illinois, as well as the Costa Rican gambling businesses, identified as Skybook.com, Largejoe.com, Theredhotel.com, and others, said the government.
In addition to the prison terms, which are to start Jan. 8, the pair were also ordered to pay $1,306,187 in restitution to the U.S. Internal Revenue Service and forfeit an additional $400,000 to the United States, said the U.S. Attorney’s Office.
The case was in U.S. District Court in Chicago. The U.S. Attorney’s Office there gave this summary:
According to their guilty pleas, both men filed false federal corporate tax returns for calendar years 2002 through 2009,
and false federal individual income tax returns for calendar years 2002 through 2008 that under-reported by $4,664,959 the total income they received from the operation of the adult club Blackjacks and the gambling business. They concealed the diverted funds from their tax preparers and the IRS and used the unreported income to acquire personal property and to pay personal expenses. The diversion resulted in a federal tax loss of more than $1.3 million.
The defendants admitted that they skimmed approximately $3,704,959 in cash from the operation of Blackjacks, and later destroyed records of the cash they diverted from the business. They also placed agents of their Internet gambling business on the payroll of another company to provide the employees with the appearance of a legitimate source of income and benefits. In return, they solicited and received kickbacks in the form of cash from the agents and concealed the payments from their tax preparers, bookkeepers and the IRS.
The defendants admitted they received approximately $1 million in gross wagers from the gambling business between 2005 and 2009, and made approximately $400,000 in net profits, which is the amount of the forfeiture judgment.
In addition to the sentence imposed earlier this month, defendants remain liable to the IRS for any and all back taxes, as well as a civil fraud penalty of 75 percent of the underpayment plus interest, the Department of Justice said.