Date: Feb. 12, 2025
Contact: [email protected]
BIRMINGHAM, AL – Ten men pleaded guilty this week to managing a multimillion-dollar sports betting operation, announced United States Attorney Prim F. Escalona and Special Agent in Charge Demetrius Hardeman of the Internal Revenue Service Criminal Investigation, Atlanta Field Office.
Timothy J. Pughsley and Nathan Burdette, of Birmingham, Alabama; Christopher Burdette, of Chelsea, Alabama; Thomas Zito of Vestavia, Alabama; Gary Rapp of Lakeland, Tennessee; Mark Giaquinto of Upton, Massachusetts; Matthew Voorhees of Englewood, Colorado; David Richards of Las Vegas, Nevada; and Joshua Gentrup of Athens, Georgia, entered their guilty pleas before United States District Judge Madeline Haikala to conspiring to operate an illegal gambling business and to their participation in a money laundering conspiracy. Jonathan Lind of Birmingham, Alabama, also pleaded guilty to conspiring to operate an illegal gambling business. Sentencing hearings for the defendants are set in May 2025.
According to the plea agreements, Pughsley began operating a bookmaking organization at least 17 years ago. The organization eventually became known as “Red44,” and bookmaking and betting activities occurred online via an offshore server located in Costa Rica. It is estimated that the organization accepted over $2 billion in wagers during its existence. Within the plea agreements, the defendants—all senior agents within Red44—agreed to pay excise tax restitution totaling $19,777,382.61 to the IRS arising from their acceptance of wagers from sports betters across the U.S. and to satisfy any income tax obligations that remain outstanding.
“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,” Escalona said. “The defendants illegally accepted millions of dollars in wagers and lived lavishly while avoiding their excise tax obligations. This office will diligently pursue those who enrich themselves in violation of the law.”
“Excise tax evasion and illegal sports betting are not victimless crimes,” said Special Agent in Charge Hardeman. “Money obtained from illegal gambling operations is often used to finance other criminal activities. IRS-CI special agents are skilled at following the money to investigate and expose these illegal organizations, who will be held accountable. Thank you to our local, state, and federal partners who assisted in this investigation.”
IRS-Criminal Investigation and Homeland Security Investigations investigated the case, with assistance from the Vestavia Hills Police Department, Shelby County Sheriff’s Office, Alabama Department of Revenue, and Federal Bureau of Investigation. Assistant United States Attorneys Catherine Crosby, Kristen Osborne, and Ryan Rummage are prosecuting the case.
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 14 attaché posts abroad.