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Extension Software Owners Arrested om Promoting Gambling Charges

10/30/2012 : SPORTSBOOK SOFTWARE COMPANY OWNERS TARGETED BY U.S. ENFORCEMENT
 
The owners of Arizona-based firm Extension Software hauled into a Manhattan court on 'promoting gambling' charge
 
Creating shockwaves through the online gambling software development industry this week is the case of Extension Software Inc, an Arizona company whose owners have been arrested and charged by officials under orders from the District Attorney for Manhattan, Cyrus R. Vance, Jr.
 
In a press statement announcing the indictment of Robert Stuart (53), Susanne Stuart (50), Patrick Read (53) and the company itself, Vance claimed the company generated "at least $2.3 million in profits" and is accused of "...promoting and profiting from online gaming software that provides online sports books the infrastructure to run illegal bookmaking operations for a variety of sports, including professional and college football and basketball, as well as baseball, hockey, horse-racing, and soccer."
 
The defendants are each charged in the indictment with one count of Promoting Gambling in the First Degree.
 
“These defendants abetted large-scale illegal gambling in the U.S. and abroad,” said District Attorney Vance. “In doing so, they gave bettors an easy way to place illegal wagers, and created an appetite for further unlawful activity.”
 
It is understood that Extension Software developed and supported an online gaming software platform branded Action Sportsbook International (ASI), which allowed bookmakers to select the sporting events they could offer in allegedly illegal bookmaking operations and manage these from offshore locations such as Costa Rica, the Caribbean, and Canada.
 
"In order to use ASI, bookmakers paid a quarterly licensing fee to Extension for an access key," the statement reveals. "For continued access, the bookmakers would make payments on the quarterly invoices they received from Extension."
 
The statement goes on to detail how licensing fees were paid, claiming that "...the overwhelming majority of the approximately $1.1 million cash and $1.2 million in money orders deposited into Extension’s bank accounts are alleged to be direct proceeds of illegal, U.S.-based bookmaking operations, including operations that conducted their activities in California, Connecticut, Florida, Illinois, Kansas, Massachusetts, Nevada, New Jersey, New York State, Oklahoma, Pennsylvania, Tennessee, and Texas."
 
Investigations into the case are continuing.
 
Vance claims that Robert Stuart was the developer of the software and supervised upgrades and technical support, whilst his wife Susanne was the company's president and finance officer. Her brother, Patrick Read, allegedly handled customer service relationships and marketing.
 
Assistant District Attorneys Michael Gates and Carey Ng of the Rackets Bureau are handling the prosecution of the case under the supervision of Assistant District Attorney Daniel D. Brownell, Chief of the Rackets Bureau, and Assistant District Attorney Eric Seidel, Chief of the Organized Crime Unit.
 
Supervising Rackets Investigator Jeremy Rosenberg, Senior Rackets Investigators Ariela DaSilva, Daniel Frooks, and Joseph Lamendola of the Investigation Bureau assisted in the investigation. Supervising Account Investigator Evelyn Serrano of the Forensic Accounting and Financial Investigations Unit also assisted in the investigation.
 
ASI software is used by over a dozen companies, including WagerWeb, Heritage Sports and 5Dimes, according to the company's website.
 
Reporting on the DA's statement, the New York Post claimed that the company made $20 million in licensing fees, but did not identify its source. The newspaper also hinted at "mob" connections with some operators using the software, again quoting its unidentified source.
 
Prosecutor Michael Gates told Manhattan Supreme Court Justice Bonnie Wittner that the defendants made at least $2.3 million in three years.
 
The newspaper pointed out that Extension licensed its software only to operators in countries outside the United States, where online gambling is not regarded as illegal.:



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