5Dimes, a popular Costa Rica-based sportsbook, has reached a $46.8 million settlement with the U.S. government following a federal money-laundering investigation, according to a settlement agreement obtained by ESPN on Wednesday.
5Dimes agreed to pay $15 million in cash, forfeit more than $30 million in assets and stop accepting wagers from U.S. customers while operating out of Costa Rica, according to the settlement agreement reached with the U.S. Attorney's Office for the Easten District of Pennsylvania.
The settlement also absolves Laura Varela, the widow of 5Dimes owner William Sean Creighton, of any criminal conduct alleged against the sportsbook. Varela assumed responsibility for 5Dimes' assets after her husband was kidnapped in September 2018 and found dead a year later, but she did not have "day-to-day authority" over its operations, according to the settlement.
"The investigation was a complete success from our perspective," Michael Lowe, assistant U.S. Attorney for the Eastern District of Pennsylvania, told ESPN. "There was gambling going on, but we discovered it, we put a stop to it."
The non-prosecution agreement allows 5Dimes and Varela to pursue opportunities in the expanding American sports betting market. Varela, who fully cooperated with the investigation, made "significant changes" to 5Dimes's operations that make it "suitable for participating in lawful gaming operations across the world," according to the settlement agreement.
"We achieved the objective, which is, she is compliant with U.S. federal law right now," Maria M. Carrillo, assistant U.S. Attorney for the Eastern District of Pennsylvania, told ESPN. "What that means for her is she is not operating in violation of U.S. law, and she is not actively taking bets from U.S. bettors.
"Whether she's positioned well for regulators, that's up for the regulators to decide," Carrillo said. "[5Dimes] certainly is no longer in violation of federal law."
In an interview with ESPN, Varela said she is " very, very happy and very excited about what the new chapter of 5Dimes can be."
Creighton, a native of West Virginia, launched 5Dimes around 2000. At a time when sports betting in the U.S was restricted to primarily Nevada, 5Dimes grew it into one of the most popular online sportsbooks that served American bettors and eventually attracted attention from federal investigators.
In 2016, the Eastern District of Pennsylvania, in conjunction with the Department of Homeland Security, revealed it was investigating 5Dimes for money laundering, according to a seizure warrant filed in U.S. District Court that year. In the warrant, an agent detailed how he believed 5Dimes instructed bettors based in the U.S. to use gift cards as a way to place and later cash out bets. Creighton was never formally charged; however, the investigation remained open for years.
5Dimes used third-party payment processors to accept illegal payments from U.S. customers, the U.S. Attorney's Office said in the settlement agreement. The third parties processed credit card transactions for 5Dimes that concealed the nature of the charges, and received funds from U.S. customers' credit cards that were then transferred to bank accounts of shell companies operated by Creighton, according to the settlement.
Varela, through her attorneys, contacted the Eastern District of Pennsylvania in the spring of 2019 and offered her cooperation to settle the case. According to the settlement, she helped retrieve assets, but the parties agreed that her cooperation "did not include information about the identities of individual U.S.-based customes." Gold coins, cryptocurrency, funds from the sale of season tickets to the Pittsburgh Pirates and West Virginia University basketball and football, and a 1948 George Mikan rookie basketball card that Creighton purchased for about $400,000 are among the forfeited assets.
The Department of Homeland Security gifted the Mikan card to the Smithsonian Institution in Washington, D.C, according to the settlement agreement.
On Sept. 7, 5Dimes posted a notice on its website that it would stop accepting online bets from U.S.-based customers and instructed them to withdraw funds by Sept. 25. Any funds not requested by bettors before the deadline will be turned over to Epiq, a third-party claims administrator who will help the distribution process. Any funds not claimed by Sept. 30, 2021, will be forfeited to the U.S government, according to terms in the settlement.
Varela's attorneys, Stephen A. Miller and Barry Boss of firm Cozen O'Connor, said 5Dimes has established a new corporate entity, 5D Americas LLC, in the State of Delaware, as the sportsbook eyes the U.S. betting market. Legal sportsbooks are operating in 18 states and the District of Columbia.
As part of the settlement, the U.S. Attorney's Office for the Eastern District of Pennsylvania said, at Varela's request, it will answer questions from interested parties, including state regulatory authorities, regarding 5Dimes and Varela.
Creighton was abducted by four men in a rented grey pickup truck around 10 p.m., on Sept. 24, 2018, after leaving the 5Dimes office in San Pedro, the Costa Rica judicial investigation department (OIJ) said last year. The kidnappers demanded a $5 million ransom and received $1 million from Creighton's family, but Creighton was not returned, OIJ said.
A year after Creighton's disappearance, the OIJ reported finding his body in a cemetery in the small fishing town of Queops, Costa Rica, approximately a three-hour drive from where investigators believe he was abducted.
In January 2019, authorities conducted raids in Costa Rica and Spain, leading to the arrest of 12 people believed to be involved in Creighton's disappearance, according to an OIJ statement at the time. Three suspects were extradited from Spain to Costa Rica in April 2019 and, as of September 2019, were being investigated for the crime of extortive kidnapping, according to the Costa Rica Office of Public Ministry.
The Assistant Prosecutor's Office against Drug Trafficking and Related Crimes for Costa Rica told ESPN in an Sept. 17 email that the case against Creighton's alleged kidnappers is in the "final investigation phase."
According to the settlement, Creighton was the founder and had exclusive control of 5Dimes until his disappearance and death. Varela told ESPN she had never been involved with the operation of 5Dimes and that the management team in place continued to run the sportsbook following Creighton's disappearance.
"Months kept going by, and he was not coming back, and the reality also starts hitting, that's really when I realized the best thing for me and my family to do was to look for legal counsel," Varela told ESPN in an interview conducted on Zoom.
Creighton grew up in Bridgeport, West Virginia. After graduating from West Virginia University in 1998 with a degree in business administration, he moved to Costa Rica with a small group of friends to launch 5Dimes. He was 43 at the time of his disappearance.
Varela says the loss of her husband, the father of her two young children, is a tragedy she doesn't believe she'll ever get over. "You just learn how to live with it," she said.
5Dimes agreed to pay $15 million in cash, forfeit more than $30 million in assets and stop accepting wagers from U.S. customers while operating out of Costa Rica, according to the settlement agreement reached with the U.S. Attorney's Office for the Easten District of Pennsylvania.
The settlement also absolves Laura Varela, the widow of 5Dimes owner William Sean Creighton, of any criminal conduct alleged against the sportsbook. Varela assumed responsibility for 5Dimes' assets after her husband was kidnapped in September 2018 and found dead a year later, but she did not have "day-to-day authority" over its operations, according to the settlement.
"The investigation was a complete success from our perspective," Michael Lowe, assistant U.S. Attorney for the Eastern District of Pennsylvania, told ESPN. "There was gambling going on, but we discovered it, we put a stop to it."
The non-prosecution agreement allows 5Dimes and Varela to pursue opportunities in the expanding American sports betting market. Varela, who fully cooperated with the investigation, made "significant changes" to 5Dimes's operations that make it "suitable for participating in lawful gaming operations across the world," according to the settlement agreement.
"We achieved the objective, which is, she is compliant with U.S. federal law right now," Maria M. Carrillo, assistant U.S. Attorney for the Eastern District of Pennsylvania, told ESPN. "What that means for her is she is not operating in violation of U.S. law, and she is not actively taking bets from U.S. bettors.
"Whether she's positioned well for regulators, that's up for the regulators to decide," Carrillo said. "[5Dimes] certainly is no longer in violation of federal law."
In an interview with ESPN, Varela said she is " very, very happy and very excited about what the new chapter of 5Dimes can be."
Creighton, a native of West Virginia, launched 5Dimes around 2000. At a time when sports betting in the U.S was restricted to primarily Nevada, 5Dimes grew it into one of the most popular online sportsbooks that served American bettors and eventually attracted attention from federal investigators.
In 2016, the Eastern District of Pennsylvania, in conjunction with the Department of Homeland Security, revealed it was investigating 5Dimes for money laundering, according to a seizure warrant filed in U.S. District Court that year. In the warrant, an agent detailed how he believed 5Dimes instructed bettors based in the U.S. to use gift cards as a way to place and later cash out bets. Creighton was never formally charged; however, the investigation remained open for years.
5Dimes used third-party payment processors to accept illegal payments from U.S. customers, the U.S. Attorney's Office said in the settlement agreement. The third parties processed credit card transactions for 5Dimes that concealed the nature of the charges, and received funds from U.S. customers' credit cards that were then transferred to bank accounts of shell companies operated by Creighton, according to the settlement.
Varela, through her attorneys, contacted the Eastern District of Pennsylvania in the spring of 2019 and offered her cooperation to settle the case. According to the settlement, she helped retrieve assets, but the parties agreed that her cooperation "did not include information about the identities of individual U.S.-based customes." Gold coins, cryptocurrency, funds from the sale of season tickets to the Pittsburgh Pirates and West Virginia University basketball and football, and a 1948 George Mikan rookie basketball card that Creighton purchased for about $400,000 are among the forfeited assets.
The Department of Homeland Security gifted the Mikan card to the Smithsonian Institution in Washington, D.C, according to the settlement agreement.
On Sept. 7, 5Dimes posted a notice on its website that it would stop accepting online bets from U.S.-based customers and instructed them to withdraw funds by Sept. 25. Any funds not requested by bettors before the deadline will be turned over to Epiq, a third-party claims administrator who will help the distribution process. Any funds not claimed by Sept. 30, 2021, will be forfeited to the U.S government, according to terms in the settlement.
Varela's attorneys, Stephen A. Miller and Barry Boss of firm Cozen O'Connor, said 5Dimes has established a new corporate entity, 5D Americas LLC, in the State of Delaware, as the sportsbook eyes the U.S. betting market. Legal sportsbooks are operating in 18 states and the District of Columbia.
As part of the settlement, the U.S. Attorney's Office for the Eastern District of Pennsylvania said, at Varela's request, it will answer questions from interested parties, including state regulatory authorities, regarding 5Dimes and Varela.
Creighton was abducted by four men in a rented grey pickup truck around 10 p.m., on Sept. 24, 2018, after leaving the 5Dimes office in San Pedro, the Costa Rica judicial investigation department (OIJ) said last year. The kidnappers demanded a $5 million ransom and received $1 million from Creighton's family, but Creighton was not returned, OIJ said.
A year after Creighton's disappearance, the OIJ reported finding his body in a cemetery in the small fishing town of Queops, Costa Rica, approximately a three-hour drive from where investigators believe he was abducted.
In January 2019, authorities conducted raids in Costa Rica and Spain, leading to the arrest of 12 people believed to be involved in Creighton's disappearance, according to an OIJ statement at the time. Three suspects were extradited from Spain to Costa Rica in April 2019 and, as of September 2019, were being investigated for the crime of extortive kidnapping, according to the Costa Rica Office of Public Ministry.
The Assistant Prosecutor's Office against Drug Trafficking and Related Crimes for Costa Rica told ESPN in an Sept. 17 email that the case against Creighton's alleged kidnappers is in the "final investigation phase."
According to the settlement, Creighton was the founder and had exclusive control of 5Dimes until his disappearance and death. Varela told ESPN she had never been involved with the operation of 5Dimes and that the management team in place continued to run the sportsbook following Creighton's disappearance.
"Months kept going by, and he was not coming back, and the reality also starts hitting, that's really when I realized the best thing for me and my family to do was to look for legal counsel," Varela told ESPN in an interview conducted on Zoom.
Creighton grew up in Bridgeport, West Virginia. After graduating from West Virginia University in 1998 with a degree in business administration, he moved to Costa Rica with a small group of friends to launch 5Dimes. He was 43 at the time of his disappearance.
Varela says the loss of her husband, the father of her two young children, is a tragedy she doesn't believe she'll ever get over. "You just learn how to live with it," she said.
hno:
This goes back a few years, waaaay before sports betting was even legal in the NJ. U think Im in a sports gambling forum AND live in NJ and dont know my betting options?
