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Bath man faces charges in Aruba sports betting
Federal officials say he ran off-shore business illegally, laundered money.
By KEITH HERBERT
Of The Morning Call
December 7, 2001
A Bath man who ran an off-shore sports betting business has been charged with illegal gambling, bookmaking and money laundering, federal officials said Thursday.
Keith Varga, 40, ran an illegal sports betting business in Bethlehem, Nazareth, Allentown and Oranjestad on the Caribbean island of Aruba, prosecutors say.
He formerly was marketing manager for another off-shore sports betting business run by two prominent Lehigh Valley brothers.
Varga was identified in a 1998 lawsuit filed in Lehigh County Court as manager of Sports and Sales Marketing, which conducted marketing and promotions for English Sports Betting, the multimillion-dollar sports betting business run by Dennis Atiyeh of Whitehall Township and Joseph Atiyeh of Louisiana, formerly of Allentown.
In March, federal prosecutors failed to win a conviction of the brothers. Both men were indicted on racketeering, illegal gambling and money laundering charges in December 2000.
Varga would face a maximum sentence of 27 years in prison and a $1 million fine if convicted. Penalties also include forfeiture of $755,769, the proceeds of the illegal sports betting operation, according to the U.S. attorney’s office in Philadelphia.
Rich Manieri, a spokesman for U.S. attorney Patrick L. Meehan, said Varga is to appear in federal court next week. He remains free, Manieri said.
According to a 10-page court document called a criminal information:
Varga directed customers to wire money for bets through his company, 21st Century Sports Wagering, by Western Union to a bank account he established on Aruba.
He traveled to Aruba every four to six weeks to collect about $25,000 each trip, and he deposited the cash into accounts in the United States. This act “concealed the source and use of the funds … used to carry on the illegal sports betting and wagering business.”
On other occasions, Varga had wagering money deposited in an account he controlled in Aruba and later had it wired to a Lehigh Valley business, where he collected it.
Gambling, including sports wagering, is legal in some Caribbean countries and has drawn bookmakers to places such as Antigua, Jamaica and Costa Rica. In prosecutions of off-shore bookmakers, the government has used federal laws barring the use of wire communication across state lines for gambling.
Attorneys defending their off-shore clients have argued that the bets — although placed over telephone lines and often via the Internet — are actually placed in countries where gambling is legal.
The government charges in the Varga case that:
In a three-month period in 1998, Varga received nearly 25,000 phone calls at 21st Century “for the purpose of obtaining sports betting and wagering information, and for the placing of sports bets and wager.”
Varga also kept personal accounts for customers who placed bets with him and credited or debited the accounts, depending on whether a customer won or lost a bet.
Over 15 months, Varga took in 2,628 wire transfers of cash from Western Union Financial Services totaling $755,769.
On Dec. 10, 1997, Varga “caused” an unnamed person in Schererville, Ind., who had placed a bet, to transfer by wire $1,050 to a bank account in Aruba that Varga had opened.
Two days later, Varga obtained $1,050 from the wire transfer that was deposited in the Aruba bank account, directing the transfer of the money to a Bethlehem supermarket.
About a month later, in January 1998, Varga had an unnamed person from San Francisco place bets with him and wire him $1,000 to an Aruba bank where Varga had an account.
A week later, Varga received $1,000 that had been sent by wire from a Bethlehem travel agency and deposited the money in a Summit Bank account in the name of his mother, Ruth Varga.
Kevin Fogerty, an Allentown attorney who represented Varga when he was sued by the Atiyehs in 1998 for allegedly defrauding English Sports Betting, didn’t return a telephone call Thursday seeking comment.
Varga has an unlisted telephone number.
In the 1998 civil suit, English Sports Betting officials claimed that Varga, while he was an employee, began operating his own sports-betting business using the Atiyeh-owned customer list.
When hired by English Sports Betting, Varga and several other defendants named in the lawsuit agreed to keep “proprietary information” confidential, court records state.
The lawsuit was ended before it was scheduled to go to arbitration, according to court
Federal officials say he ran off-shore business illegally, laundered money.
By KEITH HERBERT
Of The Morning Call
December 7, 2001
A Bath man who ran an off-shore sports betting business has been charged with illegal gambling, bookmaking and money laundering, federal officials said Thursday.
Keith Varga, 40, ran an illegal sports betting business in Bethlehem, Nazareth, Allentown and Oranjestad on the Caribbean island of Aruba, prosecutors say.
He formerly was marketing manager for another off-shore sports betting business run by two prominent Lehigh Valley brothers.
Varga was identified in a 1998 lawsuit filed in Lehigh County Court as manager of Sports and Sales Marketing, which conducted marketing and promotions for English Sports Betting, the multimillion-dollar sports betting business run by Dennis Atiyeh of Whitehall Township and Joseph Atiyeh of Louisiana, formerly of Allentown.
In March, federal prosecutors failed to win a conviction of the brothers. Both men were indicted on racketeering, illegal gambling and money laundering charges in December 2000.
Varga would face a maximum sentence of 27 years in prison and a $1 million fine if convicted. Penalties also include forfeiture of $755,769, the proceeds of the illegal sports betting operation, according to the U.S. attorney’s office in Philadelphia.
Rich Manieri, a spokesman for U.S. attorney Patrick L. Meehan, said Varga is to appear in federal court next week. He remains free, Manieri said.
According to a 10-page court document called a criminal information:
Varga directed customers to wire money for bets through his company, 21st Century Sports Wagering, by Western Union to a bank account he established on Aruba.
He traveled to Aruba every four to six weeks to collect about $25,000 each trip, and he deposited the cash into accounts in the United States. This act “concealed the source and use of the funds … used to carry on the illegal sports betting and wagering business.”
On other occasions, Varga had wagering money deposited in an account he controlled in Aruba and later had it wired to a Lehigh Valley business, where he collected it.
Gambling, including sports wagering, is legal in some Caribbean countries and has drawn bookmakers to places such as Antigua, Jamaica and Costa Rica. In prosecutions of off-shore bookmakers, the government has used federal laws barring the use of wire communication across state lines for gambling.
Attorneys defending their off-shore clients have argued that the bets — although placed over telephone lines and often via the Internet — are actually placed in countries where gambling is legal.
The government charges in the Varga case that:
In a three-month period in 1998, Varga received nearly 25,000 phone calls at 21st Century “for the purpose of obtaining sports betting and wagering information, and for the placing of sports bets and wager.”
Varga also kept personal accounts for customers who placed bets with him and credited or debited the accounts, depending on whether a customer won or lost a bet.
Over 15 months, Varga took in 2,628 wire transfers of cash from Western Union Financial Services totaling $755,769.
On Dec. 10, 1997, Varga “caused” an unnamed person in Schererville, Ind., who had placed a bet, to transfer by wire $1,050 to a bank account in Aruba that Varga had opened.
Two days later, Varga obtained $1,050 from the wire transfer that was deposited in the Aruba bank account, directing the transfer of the money to a Bethlehem supermarket.
About a month later, in January 1998, Varga had an unnamed person from San Francisco place bets with him and wire him $1,000 to an Aruba bank where Varga had an account.
A week later, Varga received $1,000 that had been sent by wire from a Bethlehem travel agency and deposited the money in a Summit Bank account in the name of his mother, Ruth Varga.
Kevin Fogerty, an Allentown attorney who represented Varga when he was sued by the Atiyehs in 1998 for allegedly defrauding English Sports Betting, didn’t return a telephone call Thursday seeking comment.
Varga has an unlisted telephone number.
In the 1998 civil suit, English Sports Betting officials claimed that Varga, while he was an employee, began operating his own sports-betting business using the Atiyeh-owned customer list.
When hired by English Sports Betting, Varga and several other defendants named in the lawsuit agreed to keep “proprietary information” confidential, court records state.
The lawsuit was ended before it was scheduled to go to arbitration, according to court