5Dimes and the U.S Department of Justice were able to come to a staggering $46.8 million settlement from an investigation of illegal US sports betting operations. In addition, there was also money laundering and wire fraud.
5Dimes announced the desire to enter the US sports betting market legally following the deal. However, state regulators could walk away simply from the long list of criminal activity that was detailed in the settlement.
5D Holdings and owner Laura Varela had to forfeit the gambling proceeds that she obtained illegally, as part of a settlement with the US Attorney’s Office Eastern District of Pennsylvania. Needless to say, they did not take the criminal investigation of 5Dimes’ offshore operations in Costa Rica lightly.
As per the report:
“Beginning in at least 2011, 5Dimes accepted wagers from and made payouts to U.S. bettors, and transferred more than $46.8 million in proceeds earned from its illegal gambling activities in such a manner as to attempt to hide the nature, location, source, and control of the funds.”
5Dimes already incorporated 5D Americas LLC in Delaware. The agreement allows Varela the “use of her assets or the assets of the 5Dimes brand to explore future options, including, but not limited to, re-constituting the 5Dimes brand to be licensed to conduct legal, regulated gaming activities in the U.S. and internationally.”
5Dimes and Why They Settled?
Varela is the widow of Sean “Tony” Creighton. Creighton, who unfortunately was found dead in Costa Rica after he was kidnapped and murdered in September of 2018, was the founder of 5Dimes. Varela is a Costa Rican citizen.
The $46.8 million was traceable to various transactions that had violated a multiple amount of sections of Title 18 of the United States Code. This settlement agreement is including the fact that 5Dimes had “acknowledged that those funds are the proceeds of various unlawful gambling-related offenses.”
Now those specific ones include:
Illegal transmission of gambling information
Different Forms Of Currency
The $46.8 million figure that was seized was not completely liquid because Creighton had originally attempted to launder the funds in more ways than one, according to the settlement.
The Department of Homeland Security Investigations obtained roughly $3.4 million in cash and other assets. Examples of asserts he had were a 1948 George Mikan rookie card he purchased for more than $400,000 and then $715,000 in rare coins.
Overall, these assets that were forfeited were worth more than $26 million. Varela has also agreed to hand over $2 million that was seized by Costa Rican authorities and pay out an additional $15 million.
Offshore Betting Viewed Illegal By Feds
The settlement and preceding investigation is quite a negative impact to those sympathetic to the legality of the offshore betting industry in the United States. The federal government previously had investigated 5Dimes’ illegal activities of US-based bets years ago and even brought forth a massive fine for the company to avoid those charges.
Even though the company is viewing the settlement as a way to try and pass state-level licensure, the underlying agreement is negatively viewed. This is because the opinions of many people who paint offshore operations as legal under US law, is now up for a very hot debate.
5Dimes will eventually try to reenter the US market legally. Once it does, will people be able to trust the brand again? The admission of ongoing violations of US law, which can be dated back at least a decade, will make for an interesting discussion topic for state regulators.
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