Internet sportsbook 5Dimes has agreed to forfeit more than $46.8 million as part of a settlement in a federal money-laundering investigation, according to a news release from U.S. Attorney’s Office for the Eastern District of Pennsylvania.
According to the settlement, reached Wednesday, 5Dimes agreed to pay $15 million and forfeit more than $30 million in assets, including the lone PSA 10 rated 1948 Bowman rookie card of NBA legend George Mikan. The card fetched a then-record $403,664 in SCP Auctions’ 2015 Fall Premier online auction.
5Dimes also agreed to forfeit a 1970 Topps gem mint Pete Maravich rookie card that sold for $130,053 in the same auction.
The Mikan card forfeited to the Department of Homeland Security was gifted to the Smithsonian, according to the U.S. Department of Justice.
Other assets forfeited included gold coins, cryptocurrency, money collected from the sale of season tickets to games involving the Pittsburgh Pirates and West Virginia football and basketball teams, ESPN reported.
According to the settlement, 5Dimes also agreed to stop accepting wagers from U.S. customers, primarily through its website — a violation of U.S. law.
The settlement absolves Laura Varela, the widow of 5Dimes founder William Sean “Tony” Creighton, of any criminal conduct alleged against the sportsbook that occurred before Sept. 30, 2020 (except for criminal tax violations, if any). The DOJ also agreed not to file any civil actions relating to the conduct described in the settlement agreement.
Varela has cooperated fully with the investigation, the Costa Rica Star reported.
“It has been a very difficult two years for me and my family,” Varela said in a news release. “But today marks a pivotal turning point and a fresh start for me and the 5Dimes brand, as well as a milestone for the legalization of sports gaming in the U.S. My husband’s death was tragic, but he loved 5Dimes and all of its loyal customers. Now his spirit will be able to live on as the 5Dimes brand begins this new chapter.”
Creighton, 43, a native of Bridgeport, West Virginia, who moved to Costa Rica, created and operated 5Dimes out of San Pedro, located in the mountainous area near the Central American capital city. The son of the owner of Giant Eagle grocery stores, Creighton founded 5Dimes in 1999, according to ESPN. At the time, only Nevada had legal sports betting in the United States. The Department of Justice stated that Creighton bought the card in the 2015 auction, paying what was at the time a record price for any basketball card.
Not quite three years later, Creighton was abducted by four men in a rented gray pickup truck after leaving the 5Dimes office. Despite $1 million ransom paid in bitcoin, Creighton was killed. His body was found a year later in a cemetery in the small town of Quepos, according to a statement from OIJ, which is Costa Rica’s judicial investigation department.
According to the DOJ, Creighton “exercised full and exclusive control” over 5Dimes, although he used an alias and operated the business through several shell companies.
In May 2016, the Department of Homeland Security Investigations opened a probe into money laundering allegations against 5Dimes, according to a seizure warrant filed in federal district court that year. In that warrant, an agent explained how he believed 5Dimes instructed bettors in the United States to use gift cards to place — and later cash out — any bets.
The betting company also used third-party payment processors (TPPPs) to accept the illegal payments from U.S. customers, according to the settlement agreement. The TPPPs would process credit card transactions for 5Dimes that hid the nature of the charges. Then, the TPPPs would receive funds from the credit cards and then transfer them to bank accounts of shell companies operated by Creighton.
Creighton was never formally charged, but the HSI investigation remained open.
“The settlement agreement announced today is a victory for the United States in ceasing the illegal activity of a company that was being investigated for a multitude of crimes, including a sophisticated money-laundering operation,” U.S. Attorney William M. McSwain said in a statement. “It is also a testament to the dedication of the investigators and prosecutors who doggedly pursued this case even after the primary target was kidnapped and murdered. As the Office has done with a variety of criminal and civil matters, we will use every tool at our disposal to hold individuals and businesses accountable and ensure their compliance with federal law.”
On Sept. 7, 5Dimes posted a notice on its website that it would stop accepting online bets from U.S.-based customers and instructed them to withdraw funds by Sept. 25. Any funds not withdrawn were forfeited to the U.S. government. The settlement will allow 5Dimes to apply to enter the legal U.S. gaming industry under a new corporate structure. The new company, 5D Americas LLC, has already been incorporated in Delaware, according to a 5Dimes news release.
“The investigation was a complete success from our perspective,” Michael Lowe, assistant U.S. Attorney for the Eastern District of Pennsylvania, told ESPN. “There was gambling going on, but we discovered it, we put a stop to it.”