Ten individuals have admitted guilt in a case involving a multi-million-dollar sports-betting operation, according to an announcement by United States Attorney Prim F. Escalona and Special Agent in Charge Demetrius Hardeman of the Internal Revenue Service Criminal Investigation, Atlanta Field Office.
The defendants include Timothy J. Pughsley, 53, and Nathan Burdette, 39, both from Birmingham, Alabama; Christopher Burdette, 32, from Chelsea, Alabama; Thomas Zito, 59, from Vestavia, Alabama; Gary Rapp, 46, from Lakeland, Tennessee; Mark Giaquinto, 52, from Upton, Massachusetts; Matthew Voorhees, 49, from Englewood, Colorado; David Richards, 39, from Las Vegas, Nevada; and Joshua Gentrup, 38, from Athens Georgia. They pleaded guilty before United States District Judge Madeline Haikala to charges of conspiring to operate an illegal gambling business and participating in a money laundering conspiracy. Jonathan Lind also entered a guilty plea for conspiring to operate an illegal gambling business. Sentencing is scheduled for May 2025.
Court documents reveal that Pughsley started the bookmaking organization over seventeen years ago. The group became known as "Red44," conducting its operations online through an offshore server based in Costa Rica. The organization reportedly handled more than $2 billion in wagers during its run. As part of their plea agreements all senior agents within Red44 agreed to pay excise tax restitution amounting to $19 million plus interest to the IRS due to their acceptance of wagers nationwide and address any outstanding income tax liabilities.
“These guilty pleas are the end result of years of hard work by members of federal and state law enforcement agencies to enforce our nation’s gambling and tax laws,” said Escalona. “The defendants illegally accepted millions of dollars in wagers and lived lavishly while avoiding their excise tax obligations."
“Excise tax evasion and illegal sports betting are not victimless crimes,” added Hardeman. “Money obtained from illegal gambling operations is often used to finance other criminal activities."
The investigation was conducted by IRS-Criminal Investigation along with Homeland Security Investigations with help from local authorities including the Vestavia Hills Police Department Shelby County Sheriff’s Office Alabama Department of Revenue as well as the Federal Bureau of Investigation Assistant United States Attorneys Catherine Crosby Kristen Osborne Ryan Rummage are prosecuting this case.