Massachusetts Man Pleads Guilty to Money Laundering, Gambling, and Obstruction of Administration of Tax Laws
|U.S. Attorney’s Office October 03, 2012|
CONCORD—John Giannelli, Sr., 66, of Danvers, Massachusetts, pleaded guilty on September 27, 2012, in the United States District Court for the District of New Hampshire to one count of money laundering, one count of operating an illegal gambling business, and five counts of impeding the administration of the Internal Revenue laws, announced United States Attorney John P. Kacavas.
According to an offer of proof made by the United States at the change of plea hearing, Giannelli operated a computer-based sports betting business while he resided in Peabody, Massachusetts, and then Kingston, New Hampshire. Giannelli controlled access, through the use of user identifications and passwords, to a gambling site and granted access to that site to numerous agents or partners. Customers making sports-related wagers were able to gain access to the site through the agents or partners, and Giannelli was able to monitor the overall betting activity.
The money laundering charges arose from a scheme in which Giannelli was listed as an employee on a former sports betting customer’s business. Giannelli provided the business with cash proceeds generated by the gambling business, and, in return, the business issued paychecks to Giannelli, thus making it appear that Giannelli’s income was legitimate. The business also generated false W-2 forms that Giannelli used to support tax returns filed with the IRS. Between 2003 and 2007, Giannelli laundered approximately $452,000 in proceeds through the scheme.
A sentencing hearing is scheduled for January 3, 2013. Giannelli faces a statutory maximum penalty of 20 years on the money laundering charge, five years on the gambling charge, and three years on each of the tax charges.
The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service.