Illegal gambling business operator heads to prison for plotting military equipment theft

CORPUS CHRISTI, Texas – A 46-year-old Corpus Christi resident has been sent to prison following his convictions of conducting an illegal gambling business and conspiring to steal government property, announced U.S. Attorney Alamdar S. Hamdani.

Nathan Nichols pleaded guilty March 21, 2022.

Today, U.S. District Judge Nelva Gonzales Ramos ordered Nichols to serve 27 months in federal prison to be immediately followed by two years of supervised release. In handing down the sentence, the court noted the dangers and potential damage that could be caused to the United States military. In addition, Nichols was order to pay over $1 million in restitution.

Nichols admitted that from March 2018 to August 2019, he operated illegal gambling businesses in Corpus Christi. He also pleaded guilty to conspiring to steal sensitive government property from the U.S. Army installation at Ft. Hood in June 2021.

Nichols was the co-owner of Theo's Bar and owner/operator of Lady Luck, both facilities containing illegal gaming devices. The establishments contained sweepstakes games which people play by using computers and monitors rather than casino-style equipment. The games are software-based and function as traditional slot-machine games or “8-liners.” However, the action of the slot-machine reels are simulated on a computer screen rather than on mechanical reels. Those playing the machines place bets before each spin and receive winnings in cash. 

In a separate case, Nichols also admitted he conspired with others to steal sensitive U.S. Army property valued at $2,176,000. He had been in contact with one of the persons responsible for the theft and requested pictures of the property before agreeing to buy it for resale. Once he obtained the items, Nichols subsequently listed them for sale on eBay.

Authorities executed a search warrant at Nichols’ residence in July 2021. At that time, they discovered sensitive military equipment including laser range finders, thermal scopes, night vision scopes, night vision goggles and laser aiming devices. All of the property belonged to the U.S. Army. 

As part of his guilty pleas, Nichols agreed to forfeit a total of  $2,185,218.73 as proceeds from his illegal activity.

Nichols will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The FBI conducted the investigation with the assistance of the Corpus Christi Police Department on the gambling case. Homeland Security Investigations conducted the stolen property investigation with the assistance of the U.S. Army Criminal Investigation Division.

Assistant U.S. Attorneys (AUSA) Joel Dunn and Christopher Marin prosecuted the cases with the assistance of Asset Forfeiture AUSA Yifei Zheng.