Organized crime and gambling have gone hand-in-hand for generations, even in a state with legal sportsbooks.
The New York State Attorney General’s Office charged 17 individuals tied to the Gambino crime family with illegal gambling and loansharking on Wednesday.
Investigators busted the Staten Island sports betting operation that took in $22.7 million in illegal wagers from more than 70 bettors from Sept. 2022 to March 2023.
The loansharking operation brought in $500,000 a week in usurious loans.
According to the indictment, the charges included first and second-degree criminal usury, and first-degree promoting gambling as well as enterprise corruption.
Mode of operations
The gambling rink’s operators used an illegal, offshore sportsbook to place the bets. When clients got deep into debt, the bookmakers would offer exorbitant loans to pay off the gambling debts, state officials said.
“Illegal gambling and loansharking schemes are some of the oldest rackets in the mob’s playbook,” New York Attorney General Letitia James said in a statement. “While organized crime may still be active in New York, today we are putting several Gambino family members out of business. These criminal enterprises took tens of millions of dollars from New Yorkers and trapped many in dangerous amounts of debt.”
Building the case
Most of the illegal activities took place at two Staten Island shopping centers through “sheetholders” who collected the wagers and money from clients at restaurants and residences as well.
Edward LaForte managed the gambling operation and took part in the loansharking with former NYPD member Frederick Falcone, Sr.
Investigators used authorized video surveillance, wiretaps, bugs, search warrants on residences, and search warrants on offshore sports betting sites to build the case against the mob-backed operators.
Four individuals involved in the illegal sports betting operations were also indicted for a separate illegal mortgage fraud scheme.
Running rampant
Illegal gambling runs rampant in the U.S., despite legal sports betting operating in 38 states.
Offshore sportsbooks and illegal bookmakers are still a problem. A study found that there were over 200 million hits on illegal sports betting sites during the last NFL season.
The Campaign for Fairer Gambling said last week that legal wagering hasn’t “made much of a dent” in illicit operations. The group commissioned a report that found that $9.5 billion of illegal gaming revenue came from New York, New Jersey, and Minnesota alone. Only the North Star State is unregulated.
Ippei Mizuhara, the former interpreter to Los Angeles Dodgers star Shohei Ohtani, pleaded guilty to bank and tax fraud on Tuesday after stealing more than $16 million from Ohtani to pay off gambling debts to an illegal bookmaker.
