LOS ANGELES—Federal authorities Thursday announced a series of cases stemming from an illegal Southern California-based gambling operation that involved current and former professional athletes, some of whom allegedly assisted with the business and others who placed large bets on games.
The principals of the operation agreed to plead guilty to conspiracy charges and admitted they took in millions of dollars in bets, many of which were facilitated by a Costa Rica-based gambling website, according to the U.S. Attorney’s Office.
One of the leaders of the scheme also admitted that he failed to report to the IRS nearly $1.5 million in income he received from the gambling scheme over two years.
The owner of the online gambling business and website pleaded guilty earlier this month and admitted the business was illegal under California law because it involved at least five people, operated for at least six years, and often had gross revenue of well over $2,000 on a single day, federal prosecutors said.
- Wayne Nix, 45, of Newport Coast, a former minor league baseball player, was charged with one count of conspiring to operate an illegal sports gambling business, and one count of filing a false tax return
- Edon Kagasoff, 44, of Lake Forest, Nix’s longtime partner in the operation, was charged with one count of conspiring to operate an illegal sports gambling business
- Howard Miller, 63, of Gardena, was charged with one count of aiding and abetting the operation of an illegal sports gambling business by assisting in the collection and payout of gambling proceeds related to the Costa Rica-based website
- Celebrity Financial LLC, doing business as Sherman Oaks Check Cashing, was charged with failing to maintain an adequate anti-money laundering program related to it cashing at least $18 million in checks from the illegal sports gambling business at its San Fernando Valley check cashing store.
- Kenneth Arsenian, 52, of Newport Beach, pleaded guilty on Jan. 26 to four charges: operating an illegal sports gambling business, filing a false tax return, money laundering, and accepting a financial instrument for unlawful internet gambling; and
- Joseph Castelao, 56, of Rancho Palos Verdes, the owner of gambling website Sand Island Sports, pleaded guilty on March 15 to operating an illegal gambling business.
Nix’s plea agreement outlines specific incidents related to the betting scheme, including receiving payments for gambling losses from a professional football player, a Major League Baseball coach and a baseball analyst. None was named or charged.
The plea agreement also discusses a bettor who wagered $1 million a year with Nix’s operation, a $5 million bet on the 2019 Super Bowl, and a sports broadcaster who told Nix he was going to refinance his home to pay off gambling debts. The bettor and sports broadcaster have also not been named or charged.
In its plea agreement, Sherman Oaks Check Cashing admitted that it encouraged customers to bring large business checks—far in excess of the $10,000 that normally triggers a Currency Transaction Report to federal authorities—and employees of the company told customers that it would not file Currency Transaction Reports, prosecutors said.
