International Businessman Pleads Guilty to Financing Racketeering Enterprise in San Diego Card Room

Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924 or Assistant U.S. Attorney Nicholas Pilchak (619) 546-9709

NEWS RELEASE SUMMARY – April 13, 2017

SAN DIEGO – Swedish businessman Petter Magnus Karlsson, who had recently been living in Asia, pleaded guilty today to engaging in an international racketeering conspiracy that used the Lucky Lady Casino and Card Room in El Cajon as a legitimate front for illegal sports bookmaking and related criminal activity. Karlsson voluntarily travelled to the United States last week to face the charges that had been pending since July 2016.

As set out in his plea agreement, Karlsson helped provide financing to lead defendant Sanders Bruce Segal in order to bankroll Segal’s bookmaking operation, which took illegal sports bets from customers across the Southern District of California and in the District of Arizona. Karlsson also provided Segal and others in the enterprise with access to offshore sports gaming websites hosted in Costa Rica, the U.K., Hong Kong, and Curacao, so that they could place large illegal sports bets online while shielding their unlawful activity from U.S. authorities.

According to the plea agreement, the enterprise’s primary offshore sports gambling website, betmex.net, was owned and operated by co-defendant David Gregg Leppo. Karlsson supervised co-defendant Pablo Ballestero Frech in managing accounts for Segal at Leppo’s website and others. Frech returned from Canada to face charges and pleaded guilty to unlawful transmission of wagering information last October.

Karlsson, Segal, and others in the enterprise regularly used runners and other means to transfer large sums of cash between themselves to fuel their operation. On one occasion, according to the plea agreement, Karlsson and Frech personally picked up a shoebox full of $90,000 in cash proceeds directly from Segal on his front doorstep. As part of his plea, Karlsson agreed to forfeit $139,834, which represented direct proceeds of his participation in the offense.

Seven defendants in addition to Karlsson have thus far pleaded guilty to gambling charges as part of cases stemming from the investigation of the Lucky Lady: Pablo Ballestero Frech, Minh Triet Dinh Nguyen, James Heng Tear, Ken Pheng Keo, Jason D. Taylor, Jeffrey Alan Burke, and Ryan Richard Buchardt.

Acting U.S. Attorney Alana Robinson commented, “For too long, transnational criminal organizations have attempted to skirt United States laws by using offshore servers, networks of illicit cash couriers and complex financial transactions. But tycoons in the lucrative world of international sports gambling now have one sure bet: If your conduct violates American law, you will find yourself in a United States courtroom and be held to account.”

“Sophisticated racketeering organizations continually rely on the mistaken notion that they can move beyond the reach of the law by spreading their operations across international borders,” stated FBI Special Agent in Charge Eric S. Birnbaum. “Today’s guilty plea demonstrates that there are no safe havens. The FBI will work tirelessly with our international partners to ensure that criminals are brought to justice no matter where they hide.”

Karlsson’s sentencing is currently set for July 17, 2017 at 9 a.m. The remaining defendants are set for a motion hearing June 26, 2017 before Judge Roger T. Benitez.

DEFENDANTS—Case Number: 16CR1695-BEN Next Court Date

Sanders Bruce Segal Motion Hearing June 26, 2017

Stanley Samuel Penn Motion Hearing June 26, 2017

Petter Magnus Karlsson Sentencing

David Greg Leppo Motion Hearing June 26, 2017

Pablo Ballestro Frech Sentencing

Sydney Bruce Segal Motion Hearing June 26, 2017

Joseph Edward Spatafore Motion Hearing June 26, 2017

Minh Triet Dinh Nguyen Sentencing

James Heng Tear Sentencing

Ken Pheng Keo Sentencing

Jason D. Taylor Sentencing

Jeffrey Alan Burke Sentencing

SUMMARY OF CHARGES

Count 1: Racketeering Conspiracy to Conduct Enterprise Affairs (RICO Conspiracy), in violation of Title 18, United States Code, Sections 1962(c) & (d)

Maximum penalties: 20 years in prison, 3 years supervised release, and a $250,000 fine

Defendants 1-6

Count 2: Illegal Gambling Business, in violation of Title 18, United States Code, Section 1955

Maximum Penalties: 5 years in prison, 3 years supervised release, and a $250,000 fine

All defendants

Count 3: Transmitting Wagering Info, in violation of Title 18, United States Code, Section 1084(a)

Maximum Penalties: 2 years in prison, 1 year supervised release, and a $250,000 fine

Defendants 7 and 11

DEFENDANT—Case Number: 16CR1696-BEN Next Court Date

Robert Jay Zaben Motion Hearing June 26, 2017

AGENCIES

Federal Bureau of Investigation

San Diego Police Department

Internal Revenue Service – Criminal Investigation

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.