Two brothers have been charged by the U.S. District Court in Nevada in connection with a U.S. Attorney’s Office investigation that included the former offshore rebate shop International Racing Group.
Court documents were recently unsealed against Jeffrey Jelinsky and Michael Jelinsky that carried felony charges of running an illegal gambling business, money laundering, and interfering with the administration of IRS laws. Included in the federal action were the seizing of assets totaling more than $5.3 million, including $1.47 million in three IRG-affiliated bank accounts, according to court documents.
Jeffrey Jalinsky, per a plea agreement signed in December, recently entered a guilty plea on two counts, running an illegal gambling business and money laundering. The court accepted the plea and sentencing is scheduled for May 29, according to docket information.
The charges are the latest development in an investigation first publicly disclosed by Youbet.com in October 2007 following a raid of the company’s California headquarters.
The company said shortly after the federal raid in October 2007 that about $1.5 million in IRG accounts had been seized by federal agents. The company announced last March it had “resolved” its part in the federal investigation -- about a month after it had closed IRG -- and would not be charged in return for its continued cooperation in the investigation.
The indictments declared more than $1.3 million was seized in named bank accounts for It’s All Good Buddy Inc., a Nevada corporation that was part of the assets Youbet.com acquired when it purchased IRG in 2005. The IRG deal was put together during the tenure of former Youbet.com chairman and chief executive officer Charles Champion, who left the company in late 2007.
Youbet.com in 2005 acquired IRG, which was based in the Netherland Antilles island of Curacao, for a reported $3 million in cash and stock. In November 2008, Youbet.com announced it had settled several disputes involved with the purchase terms of IRG.
According to court documents, the Jelinksys' alleged operation, in part, "included individuals and illegal bookmakers with access to large amounts of money.” The alleged operation, which was based in Las Vegas-area casinos the brother frequented, involved the “laying off” of bets by the Jenlinskys, who were able to “reduce the payout risk associated with booking some of the large wagers.”
If the defendants believed a bet was going to be a winner, they would lay off the wager on offshore accounts, but if it was believed to be a loser, the Jelinsky operation would “book or hold the bet itself,” court documents claim.
A bulk of the alleged action was fed through www.bookmaker.com, an “offshore race and sports book located in Costa Rica,” according to court documents. Court documents claim the brothers also established an account with IRG. In addition to the IRG funds, $2.7 million was confiscated from the Poker Palace casino in Las Vegas.